I was pretty surprised to see that WLW was NOT getting setup on Windows Server 2008. While trying to set it up on my Win 2k8, which I am using as my desktop I was getting the following error...
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Windows Live Installer
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Sorry, Windows Live programs cannot be installed on Windows Server, Windows XP Professional x64 Edition, or Windows operating systems earlier than Windows XP Service Pack 2.
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OK
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With some help from my colleagues, I got it working. What you need to do is, install WLW on any PC which is NOT Win 2K8. Once done, copy the folder where you installed it to and paste it on Win 2k8. Try running WLW and you should be good (at least I am). I don't know why this is the way it is... but if you are desperate to get WLW on Win 2k8, you know what to do 
Hope this helps,
Rahul
Quote of the day: The nice thing about egotists is that they don't talk about other people. - Lucille S. Harper
