MS Security Essentials also uses the Modules Installer--can you use Windows Update by the way? Also, did you have Visual Studio 2008 installed at some point? I remember reading that there was an issue with the VS08 SP1, but the solution to that was what I have already given.
I'm not sure what a fix would be at this point, but here are some options (my rec. is the first one):
- Install a fresh copy of Windows 7 (remember to backup your personal files)
***Backup your files (full backup or create a restore point recommended) for the following
- If you have system restore enabled, restore to the earliest date you think you can manage and see if that works
- Remove SQL server 2005 and all of the Visual C++ redistributable, reboot and try to install Photosynth; if that works and if other software you have requires the C++ redis. reinstall (if Windows Update doesn't, you can find them on MSDN)