Yeah it turned out to be a terms of use update. Wouldn't let me sign in till I agreed to the new terms.
Anyway back to your issue. I'm not sure what's going on as that error code is just a basic install error code. In fact if you google the code you'll see it's been associated with different software from games to MSE.
Try using this link here and follow the instructions -
http://www.microsoft...livelaunch.aspx
Let me know.