We have identified a bug that occurs when your IE proxy settings point to a proxy script that is invalid or not reachable. We are working on a permanent solution to this problem but in the meantime have come up with this workaround.
1)
Open Internet Explorer.
2)
Click Tools, then click
Internet Options.
3)
Click the
Connections tab, and then click the LAN settings button.
4)
Select the check box for
Use automatic configuration script.
5)
Copy the URL that is shown in the Address box below the check box. Paste it somewhere that you can retrieve it from later (in case you want to restore this setting when you are done installing
Windows Live)
6)
Delete the URL currently shown in the Address box, and replace it with a space character
7)
Click OK in Local Area Network (LAN) settings dialog.
8)
Click the LAN settings button again.
9)
Now clear the check box for
Use automatic configuration script.
10)
Click OK in Local Area Network (LAN) settings dialog.
11)
Click OK in the Internet Options dialog.
12)
Run the installation of Windows Live Essentials again.
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