I am having nearly the same issue on an AMD dual core machine with virtualization turned on in the bios, this is Windows 7 Professional 64 bit.
It completes the activation and 46x Meg file but the third file from Microsoft states that this patch isn't applicable. So I don't get icons in the start menu. It creates a Windows XP directory with a 1 gig file but no exe or application that I can run, best I can tell that third fail not completing gives me an incomplete install.
Help, as I need to get this running to run an old application I have.