There must be a real solution to "Windows found driver software for your device but encountered an error installing"

Question

"Windows found driver software for your device but encountered an error installing"
I've spent hours researching this error - Seems like many people have the same issue although there is no difinitive fix or known cause.
I'm hoping someone here has an answer.
Windows 7 Home Premium x64 OEM (HP)
This is not an upgraded Vista system.
It's not a specific driver related issue as it's the same response/effect be it graphics/chip set/usb/printer drivers.
Please dont suggest to flatten and re-install or run a repair install - It's not an option, I only have remote access to the unit
as it's currently in field use.
This is a machine specific issue - identical machine purchased at the same time and configured the same has no issue.
So the story.
User has been fine for weeks - no hardware of software changes except Windows Updates.
A Camera/USB connection that was working no longer does.
Tried in all USB ports
Plug in - windows announces found new hardware, tries to install drivers then fails
with "Windows found software for your device but encountered an error installing ...."
Device manager finds and identifies device although it is in the 'Unknown Device" category.
Manually updating drivers via search/internet or point directly at a driver has exactly the same effect.
Thinking this was just the camera drivers - I researched and downloaded new drivers from camera manufacturers sites
Fuji and Canon.
Same effect.
Deleted/uninstalled drivers completely, deleted/uninstalled all USB root hub and USB devices (hidden and visible)
SFC /Scannow finds no error
Cold boot finds USB and chipset(?) devices on boot attempts to reinstall then we get
 "Windows found driver software for your device but encountered an error installing"
So now I have no usb devices at all - memory stick/card reader/printer...... nada.
in fact if I try to update any device driver I get the same message generated.
Restore point does not help either. 
After much trawling I found reference to a permisions issue and stale driver cache data.
(This is using an administrator account - not user with admin permissions?)
I'm willing to try anything at this time
I deleted the infcache.1 and other .dat files under c:\windows\system32\driverstore
Copied the usb  .inf and .pnf from the appropriate FileRepository directory into c:\windows\inf
Uninstalled all the usb/unkown devices from device manager again.
Rebooted
Takes a little longer to boot as I take it it's rebuilding the driver cache then
a very short hurrah!!!
I can now use usb memory card and pen drives - no issue
Plug in a camera or printer...
"Windows found driver software for your device but encountered an error installing"
Several attempt at this trying different driver versions.
It should not be vendor specific, the other field machine that works is using Microsoft drivers for these devices.
I even copied the drivers from one machine to the other - repeated everything above...
"Windows found driver software for your device but encountered an error installing"
And then the nail in my sanity
Try windows update....
Reboot
"Windows found driver software for your device but encountered an error installing"
but this time its different.
The device it thinks it cannot install is the generic MTP-PTP drivers  (Photo Transfer Protocol -so am I getting somewhere)
so it still finds but cannot install.
The cameras are always found but appear as 'unknown devices' and cannot be accessed
Uninstall all USB/unkown again - reboot..
Same message and this time I've lost all the USB again.
Restore point to before Win Update gets me USB back again although I still have no cameras  - so theres an update issue as well.
This has to be tied down to a file access/ registry problem although I'm loath to go cutting about without some guidance.
I'm no great believer in 'registry cleaners' unless anyone can point to a definitive/no ad's/sales version that really works.
As I said above, flattening/rebuild at this time is not an option - the user is not best pleased and I'm completley stumped.
If anyone has experienced(manu of you have) and fixed(still to find one) this issue please let me know how as soon as possible.
Chris 

Answer 1

I know I am replying to an old thread - but I have the answer and resolved this error, and since this message comes up first in search results, and part of my answer came from this thread, I wanted to help someone else as this took an extra
12 hours and a lot of technical insight to resolve. See below for detailed explanation that others ask for above.
My original issue was that iTunes didnt reinstall. generating this error that said I am trying to access an unavailable network resource and to browse to find itunes64setup (again). This may partly have been due to me deleting old install version folders.
Research led me to completely uninstall apple products and reinstall per their instruction and fixed the issue with iTunes. see
Remove and reinstall iTunes and related software components for Windows Vista, Windows 7, or Windows 8 - Apple Support
The SAME error I had while updating itunes recurred while uninstalling it from my Windows 7 SP1 system...so I went to microsoft Fixit and attempted to correct and it properly uninstalled iTunes for me, which allowed the reinstall.
What didnt work was my USB web root/ root hub, which partly involved my older system and USB 1.0, and the delete/reinstall existing drivers with the c:\windows\winsxs folder as source of drivers (thank you Magon Liu!!!) which I had to figure out what/why
and how.
Then I had an intel chipset issue...my new Iphone wasn't recognizing in plug and play, and there was an error with installing the device drivers for my new iphone 6. Manual applications didn't work, even though a generic device showed in control panel -
device manager with a yellow !
Per above blog answer - I tried to remove and reinstall my USB controller or update the drivers (I have an Alienware M15 laptop - a few years old.) I discovered that the USB host controller - an Intel(R) 5 Series / 3400 Series Chipset family USB Enhanced
Host controller - (port) was not covered by current Intel chipset programs which are Series 6 and later, but did have an update (8/20/2009 v9.1.1.1020)  that supported USB 2.0 (and therefore 3.0 backwards compatibility which as an issue with my new iPhone
and some USB thumb drives.) To find this I had to look at the Support - Downloads and Drivers - browse for drivers and somewhere found an option to look for older no longer supported drivers. I found infinst_autol.exe for my case.
Once downloaded I tried to install and failed. Found the log in C:\Intel\Logs and contains:
[InstallDev]
          [Device]
            Driver = C:\Users\DAVIDS~1\AppData\Local\Temp\IPMx7\WIN7\ibexusb.inf
            INF = C:\Users\DAVIDS~1\AppData\Local\Temp\IPMx7\WIN7\ibexusb.inf
            Installed INF =
            Previous driver package =
!           Warning 0xE0000235: DriverPackageGetPath failed.
            Difx = 64 bit
Execute command: C:\Users\DAVIDS~1\AppData\Local\Temp\IPMx7\x64\Difx64.exe -DriverInf "C:\Users\DAVIDS~1\AppData\Local\Temp\IPMx7\WIN7\ibexusb.inf" -Flags 20 -KeyPath "Software\Intel\Difx64"
            Using RegDeleteKeyEx
!!!         ERROR 0xE0000246: DriverPackageInstall generated an unexpected error
 HERE'S THE ADDED EXPLANATION TO BRIAN'S POST THAT EXPLAINS THE SECURITY ISSUE:
This turned out to be an error for two reasons. First, after manually running the command in an "run as administrator" window (same error result), thinking it related to my anti-virus (turned that off/disabled firewall and A/V), and from this thread
granting my user administrative rights to files in an install folder and trying to reinstall inf files and drivers from C:\Windows\winsxs vs my copied infinst_autol.exe expansion (as found from log in C:\Users\David Samuels\AppData\Local\Temp\IPMx7\WIN7 folder).....that
there was an easier solution as the reason this error actually happens is a permissions problem.
To access the proper windows system folders - you have to be the TrustedInstaller service - not just in the administrator group...or you have to be the actual "Administrator" account. To become actual administrator on
your own laptop, Open a command window "run CMD.exe as administrator", then execute command
> net user administrator /active:yes
This creates a local PC Administrator account with no password. Coincidentally it has proper permissions to windows directories for installing drivers. Log in as this user, go to device manager and update the USB hub and any other drivers. if updating the
USB root - it doesn't replace it right away as the system cant disable the currently resident in memory "running" driver  - you have to update, then restart the system, log in as administrator and repeat at the next lower layer that has issues.
Once completed - log in as yourself again and disable the administrator account in a command window with > net user administrator /active:no
This in my case enabled all my USB 2.0 and 3.0 devices on my originally only USB 1.0 laptop and everything else works properly again - I hope this helps many of you to resolve your own issues that were difficult to find and resolve and that got as far as
this thread. Good luck!
 Regards,
 Dave Samuels