I was trying to install Gamer XP v4 yesterday, a heavily modified Windows XP for gamers, and I got an error message like the one below.
“An error has been encountered that prevents Setup from continuing.
One of the components that Windows needs to continue Setup could not be installed.
Manifest Parse Error : Invalid at the top level of the document.
press OK to view the Setup log file.”
When I press OK this is what I get:
Error:
SXS.DLL: Syntax error in manifest or policy file ” D:\I386\asms\52\POLICY\MSFT\WINDOWS\NETWORK\RTCDLL.MAN” on line 0
***
Error:
Installation Failed : D:\I386\asms. Error Message : Manifest Parse Error : Invalid at the top level of the document.
***
Fatal Error
One of the components that windows needs to continue setup could not be installed.
Manifest Parse Error: Invalid at the top of the document.
I thought that maybe the Gamer XP was corrupted and somehow was not suitable to install on my computer. I tried searching if anyone had the same problem as me during installing Gamer XP but none had this problem. I started to think that maybe I did not burn the ISO image correctly because I was doing a fresh clean installation.
From Microsoft Knowledge Base, it stated that this issue may occur if the file that is on the Windows XP CD-ROM is damaged. I checked the Gamer XP CD that I burnt and it has a little scratch. I took a new CD-R and burn the Gamer XP ISO image again. This time I am able to install without problems.

So if you have this error message, just try another CD, I would say most of the time will work.