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#1
Some corrupted (un)installer located inside the Installer folder seems to be causing the problem.
Go to C:\Windows\Installer\{DEF35...}\ and first make a backup of "_60ADE~1.EXE" file and then delete it and see if the problem persists. If this screws thing up, put that file back.
Go through the instruction mentioned here - The NTVDM CPU has encountered an illegal instruction - Microsoft Community
The problem was solved there.
Thanks to everyone that replied.