DTC Setup Error when installing IIS

Greetings all,
I'm stumped and hope maybe someone here has ran into this problem before. I installed XP Pro in a VM on a Win7 machine using Windows Virtual PC. Over all everything went fine. Installed SP3 and ran all 49 updates. So far so good. Now, when I attempt to install IIS I get the following error.

Code:

[b]Distributed Transaction Coordinator Setup Error[/b]

Sub-component Distributed Transaction Coordinator raised an exception while processing the OC_COMPLETE_INSTALLATION setup message.
d:\xpsp\com\com1x\dtc\ntdtcsetup\src\csetuputil.cpp (line 2748)
Error Code = 0X80004005 

Unspecified error
Failed to execute function 'DllRegisterServer()' in
'C:\WINDOWS\system32\mtxoci.dll'.

This is what I have done thus far. I have gone into services and verified COM and DCom are enabled.
I then went into my system32 folder, deleted the mtxoci.dll file and then went in and copied the MTXOCI.DL_ file from the XP CD and expanded it to the system32 folder in hopes of putting a fresh MTXOCI.DLL file in the folder. That did not work. Received the same error when attempting to install IIS.
Now once I recieve this error and I select "OK" it continues with the IIS install, and gives the message "You have succesfully completed the Windows Components Wizard"
When I verify IIS, it's not working.

Thank you in advance for any assistance you can offer.

All the best,

Ian