SQl Server SP1 is only supported on Windows 7. That could be the issue.
From:
http://www.pluralsight-training.net/community/blogs/matt/archive/2010/03/01/getting-sql-server-2008-management-studio-express-installed-on-windows-7.aspx
Solution, change the registry entry for the SP key from 0 to 1 (one) and then run the installer. Voila, installs with no problem. Now I just need to reapply SP1 (well, after actually walking through the less-than-intuitive installer to apply the management studio) and I’m good to go.
Hope this saves someone else some time.