.NET 3.5 setup woes

Today I tried to install .NET 3.5 on one of my web servers. It's a virtual server running Windows Server 2003 Standard x64 under Virtuozzo. I downloaded the complete redistributable (197 MB). The setup, however, failed with an error message that was not too comprehensible: Error code 1603 for this component means "Fatal error during installation." Setup Failed on component XPSEPSC x64 Installer