In the process of tracking down the root of my Outlook 2007 "missing manifest" bug I discovered that Windows Live Installer was failing with a "catastrophic error". (Love that! It's not as good as "Abort, Retry, Fail" but, for the anemic Microsoft of modern times it's not bad.).
I went down this root because the nature of the missing manifests suggested the bad behavior was related to either Office Communicator or Live Messenger. Installing Communicator didn't fix things, so Live Messenger was up next. Trying to install Live Messenger led to my "catastrophic error".
Others have run into this problem with Live Suite installs. That page pointed to the beta version of Windows Live apps as the problem. So it was with me. I used the Add/Remove control panel Windows Live Beta installer to remove all my Windows Live products. (Some had been updated to non-beta status by Windows Update, but it appears that wasn't enough.)
After that I was able to run the Windows Live Installer normally and to add them all back in.
So now on the Manifest bug ...