Windows installer errors can be a real pain in the ass. Check out http://consumer.installshield.com/kb.asp?id=Q111019 and follow the steps there and hopefully you'll be able to sort things out. Good luck.
It sounds like when you're clicking scan, the option for an incremental backup is selected. This is a lot quicker than doing a full back up as it just adds new files etc instead of everything from scratch. You'll need to create a full backup first (there should be an option for it somewhere).