Honestly, that event log isn't unusual. While you never want errors to occur, it's how they're handled that really matters. You could have tens of thousands of errors and warnings in Event Viewer, but if Windows was able to overcome them and seamlessly hide them from you there's not much to worry about. In this case a small error occurred while installing new software, which is fairly common, and can be ignored.
As to the IE7 issue, is that still occurring? If so, start a new thread detailing the problems you've been encountering with it, including any exact error messages, if applicable.
John
Well, I'm back. I've had to do the Recovery thing again. IE7 refused to work with no solutions found for 2 days. And now Event Viewer has these Errors & Warnings!
2 user registry handles leaked from \Registry\User\S-1-5-21-3660366223-1404631445-608496770-1000_Classes: Process 944 (\Device\HarddiskVolume1\Windows\System32\svchost.exe) has opened key \REGISTRY\USER\S-1-5-21-3660366223-1404631445-608496770-1000_CLASSES Process 1900 (\Device\HarddiskVolume1\Windows\System32\spoolsv.exe) has opened key \REGISTRY\USER\S-1-5-21-3660366223-1404631445-608496770-1000_CLASSES\Local Set 2 user registry handles leaked from Log Name: Application
Source: MsiInstaller
Date: 6/20/2007 7:38:23 PM
Event ID: 1015
Task Category: None
Level: Warning
Keywords: Classic
User: HomeOffice-PC\STPadell
Computer: HomeOffice-PC
Description:
Failed to connect to server. Error: 0x800401F0
Event Xml:
<Event xmlns="http://schemas.microsoft.com/win/2004/08/events/event">
<System>
<Provider Name="MsiInstaller" />
<EventID Qualifiers="0">1015</EventID>
<Level>3</Level>
<Task>0</Task>
<Keywords>0x80000000000000</Keywords>
<TimeCreated SystemTime="2007-06-21T00:38:23.000Z" />
<EventRecordID>690</EventRecordID>
<Channel>Application</Channel>
<Computer>HomeOffice-PC</Computer>
<Security UserID="S-1-5-21-3660366223-1404631445-608496770-1000" />
</System>
<EventData>
<Data>0x800401F0</Data>
<Data>(NULL)</Data>
<Data>(NULL)</Data>
<Data>(NULL)</Data>
<Data>(NULL)</Data>
<Data>
</Data>
<Data>
</Data>
</EventData>
</Event>\Registry\User\S-1-5-21-3660366223-1404631445-608496770-1000_Classes: Process 944 (\Device\HarddiskVolume1\Windows\System32\svchost.exe) has opened key \REGISTRY\USER\S-1-5-21-3660366223-1404631445-608496770-1000_CLASSES Process 1900 (\Device\HarddiskVolume1\Windows\System32\spoolsv.exe) has opened key \REGISTRY\USER\S-1-5-21-3660366223-1404631445-608496770-1000_CLASSES\Local Settings\Software\Microsoft\Windows\Shell\MuiCache tings\Software\Microsoft\Windows\Shell\MuiCache
And thats the short list!there's more...have I killed it good or do I just need to start over? and whats the best way to do it? Obviously the way I'm using isn't working!

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic