Windows 7: Repair installation fails - Former version restored

Hi,
I'm trying to repair my Windows 7 ultimate installation. When the procedure reaches its final step, I keep getting a message that the repair failed and that my system is being restored to its former state.
Is there a way to depict the cause of this failure? Does Windows 7 keep a log? Is it accessible?
Do you know of any other method to overcome this obstacle?

Why are you repairing the installation? why not just install new OS from begin?

Are you using "repair my computer" option maybe?

My pc is overloaded with various pieces of software. Therefore, I'm ready to walk a long way keeping my current installation.
In addition, my current only problem is inability to run IE. I raised this issue on various support forums, tried many tips, but none helped. Looks like the only possible option (prior to clean installation) is repair installation. Still, my repair install efforts failed, and the system restores to its prior version. All I would like to know is, why? Hopefully, the "why" will lead me to a solution.

Stalled Win7 install log file location

Google the last entries to find out what may be stalling out the Repair install.

Try establishing a Clean Boot which can also help with performance problems. Having an OS "overloaded" with programs is never a good thing so I would prune them as best you can or at least turn them off from starting with Windows if they are not needed then.

You sound like the perfect candidate for Clean Reinstall - Factory OEM Windows 7 which steps are the same for retail.

Even though I agree with you that " Having an OS "overloaded" with programs is never a good thing", in my case, it's not the time. I'm ready to pay the overload costs so long as all desired functions work. Since IE stopped working, I look for a limited solution.
As far as information located in the following files:
See if you can find these - the last entry should offer a good clue:

C:\$WINDOWS.~BT\Sources\Panther\setuperr.log

C:\$WINDOWS.~BT\Sources\Panther\setupact.log
C:\$WINDOWS.~BT\Sources\Panther\miglog.xml
C:\$WINDOWS.~BT\Sources\Panther\setupapi\setupapi.dev.log
C:\$WINDOWS.~BT\Sources\Panther\setupapi\setupapi.app.log
C:\$WINDOWS.~BT\Sources\Panther\PreGatherPnPList.log
C:\$WINDOWS.~BT\Sources\Panther\PostGatherPnPList.log

I failed to find these files on my system. (Looks like these are specific to 64 bit system, not to my 32 bit).

Is there any other place I can find log files?

You can search C for panther to see if it yields them. If not what issues did the pre-install Upgrade Advisor report?

Have you tried again after establishing a completely clean boot? Restart to check again everything is unchecked in both places in msconfig after hiding MS services.

Looks like I'm still unclear: I didn't run a clean install, what I did was to run a repair install. I did it twice, once with the original Windows 7 os and then with the SP1 update. (My installation disk was adjusted to the level of the os). In both cases the repair procedure almost ended, but in the last seconds I got this announcement that the installation failed and the former version is to be restored. In both cases, the former version suffers from the same annoyance, no IE.

Have you checked in Control Panel>Programs and Features>Turn On or Off Windows Features that IE is turned on? I was not privy to your help thread on this topic.

Yes' I tried this option, turned back to IE8 and again to IE9, and stayed for a while without any of the two.