I had the exact same problem too, but fortunately, I found a way to fix it.
If you pay attention, you'll notice (at least for me), it'll complain about this "sources" thing while it tries to install the Games for Windows - Live redistributable. Now, the reason I have that in the first place is because I already have a Games for Windows game (H2V).
Basically, there's some kind of a conflict with the Redist. All I did was go to Control Panel, and just uninstall the Games for Windows - Live redistributable. Then tried installing GSE 2.0, installation, and all of my Games for Windows games worked fine.
Hope that helps.