It looks like after doing multiple install and uninstall; I found non of JRE bundles are getting installed on the machine.
Chris G, could reproduce this issue after doing some investiagtion. Here is what he has done.

Run this query on the problematic machine.
    reg query "HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager" /v "PendingFileRenameOperations"

to dump the PendingFileRenameOperations registry entry
Then on my XP machine I ran:

    reg add "HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager" /v "PendingFileRenameOperations" /d "\??\C:\Program Files\Google\GoogleToolbarNotifier\1.2.1128.5462\swg61.tmp\0\0\??\C:\Program Files\Google\GoogleToolbarNotifier\1.2.1128.5462\Goo62.tmp\0\0\??\C:\Program Files\Google\GoogleToolbarNotifier\1.2.1128.5462\res63.tmp\0\0\??\C:\Program Files\Google\GoogleToolbarNotifier\1.2.1128.5462\0\0\??\C:\Program Files\Google\GoogleToolbarNotifier\1.2.911.3380\0\0\??\C:\Program Files\Google\GoogleToolbarNotifier\0\0\??\C:\DOCUME~1\admin\LOCALS~1\Temp\Google Toolbar\inu64.tmp\0\0\??\C:\DOCUME~1\admin\LOCALS~1\Temp\gus65.tmp\0\0\??\C:\DOCUME~1\admin\LOCALS~1\Temp\Google Toolbar\swgBC.tmp\0\0\0"

and was able to duplicate the problem.

    MSI (c) (18:44) [17:14:07:289]: Doing action: CheckPendingFileRenameOperations
    Action 17:14:07: CheckPendingFileRenameOperations.
    Action start 17:14:07: CheckPendingFileRenameOperations.
    MSI (c) (18:54) [17:14:07:319]: Invoking remote custom action. DLL: C:\DOCUME~1\CHRISG~1\LOCALS~1\Temp\MSI15.tmp, Entrypoint: MSICheckPendingFileRenameOperations
    Action ended 17:16:17: CheckPendingFileRenameOperations. Return value 3.