ITunes 7 upgrade fails: The folder path 'C:' contains an invalid character

I see this message when I try to upgrade to ITunes 7.
The path selected is C:\\Program Files\iTunes (the default one).
Also tried to manually browse to this directory, in case something was wrong with default path.
Also tried running Registry Mechanic in case there were strange characters in any of my registry settings.
Nothing helps.
c

C:\Documents and Settings\somename\Local Settings\Temp\QTInstallCode.log shows this:
QuickTimePreInstallProc Enter
Moving QTPrefs file (if necesary) to new location...
Getting QT preinstall info...
Getting QT process count...
Ignoring process 'ZCfgSvc.exe' as possible QT process...
Module using "QuickTime.qts": "QuickTime.qts"
Process using QT: "iTunes.exe"
Current QT processes = 1
Ignoring process 'ZCfgSvc.exe' as possible QT process...
Module using "QuickTime.qts": "QuickTime.qts"
Process using QT: "iTunes.exe"
Current QT processes (again) = 1
Current QT processes still > 0
Will check for QT version: 7.1.3.100
QT DLL path: "C:\Program Files\QuickTime\QTSystem\QuickTime.qts"
Installed QT DLL "QuickTime.qts", version = 7.1.0.210
GetQTInstallInfo: Older QuickTime installed
GetQTInstallInfo: is QTPro - no, upgrade would invalidate - no
Final result: 3 (error=0)
QuickTimePreInstallProc Exit (error=0)

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