Sql server 2008 R2 installation fails with Error: 17204
This is a known issue which has several causes:  


The first thing to check is your permissions on local machine:  
Are You a local Administrator?  
Is there a group policy that might prevent you from installing \ debugging?  


If these do not resolve the problem in your case, and you have verified the required permissions, please provide more info:  


What parameters do you use during installation (beside the default ones)?  
Which Edition of SQL Server are You installing?  
Do You use Default instance name?  
On which O/S are You installing?  


EDIT:
Next steps: 
1. open the folder ":\Program Files\Microsoft SQL Server\100\Setup Bootstrap\Log
2. Find a file named Detail.txt
3. This file has a complete log, You need to find the FIRST error that occured during installation.
4. Paste it here, only the part with the error.  

EDIT:
Added Solution to comments, waiting to hear if the problem is solved