This stumped me the first time I saw it. I continued to accept the EULA, but I still got the message. I kept doing the same thing over and over, one definition of insanity.
The problem is actually a fairly simple one. So what is the problem. It involves the way that Vista limits installations to reduce unwanted applications from installing. The problem is that in this case, it creates its own problem.
Here is the basic Microsoft solution, from 884202.
To resolve this behavior, follow these steps:
Log on to the computer by using a user account that has administrative credentials.
Start an Office program, such as Word. The End User License Agreement dialog box appears.
Note For Windows Vista, click Start, click All Programs, click Microsoft Office, right-click an Office program, click Run as administrator, and then click Continue.
Click I Accept.
Exit the Office program that you just started.
Repeat step 2 to step 4 for the other Office programs that still prompt you with the EULA.
If this does not correct the problem, the same bulletin has the steps for editing the regsitry.
Berfore starting this, I recommend a program called ERUNT. It backs up the entire registry in case you make a mistake. The Microsoft regedit does not back up everything.
Once you have a backup, you can edit the registry. Follow the instructions of this Microsoft tech bulletin, 884202.
If you are not comfortable doing this yourself, call a reliable computer technician, like me.