Try to install  it on another drive. It worked for us.

Goto the MS Product Support Services search site:
support.microsoft.com/default.aspx

Select "SharePoint Portal Server" and search for the words

VAIFy failed

using "All of the words entered".

You get a list of the following 5 KB articles that look promising:

Search results:

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gif> SPS:
<support.microsoft.com/default.aspx
"0x80072eef" error  Message Occurs and setup  Fails (Q298880)

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When sharepoint  Portal Server setup fails, you may receive a fatal  error
window with a red X next to the Web Storage System component. The
following error messages are logged in Errorlog.txt, which is located at

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<search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet.
gif> SPS:
<support.microsoft.com/default.aspx
"0x80004005" or "0x80072efe" Error Messages Are Logged When You Install
SharePoint Portal Server (Q309272)

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When you are installing  SharePoint Portal Server, the installation may
not work, and one of the following sets of error messages may be logged
in the Eventlog.txt file:

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<search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet.
gif> SPS:
<support.microsoft.com/default.aspx Setup
Does Not Respond When You Use Cached Credentials (Q297432)

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When you install  SharePoint Portal Server, installation may fail, and
the following error messages are logged in the

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<search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet.
gif> SPS:
<support.microsoft.com/default.aspx IIS
Lockdown Tool Affects SharePoint Portal Server (Q309675)

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One of the following symptoms may occur:

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<search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet." target="_blank" rel="nofollow">search.support.microsoft.com/.../blue_bullet.
gif> SPS:
<support.microsoft.com/default.aspx Setup
FAQ and Troubleshooting Guide (Q290734)

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The following FAQ contains important information about SharePoint Portal
Server installation, as well as troubleshooting steps and known Setup
issues.

Your tip did the trick thanks! I looked around in the MS
site as suggested, but there wasn't anything about this particular
error number.

have found a Qarticle by chance on that prob.

support.microsoft.com/default.aspx