The EXE you download from Rim for DM is a self extracting EXE. Extract it to C:\Windows\Options\BBDesktop42SP1
The reason for this is because if you attempt to modify or repair the installation (sometimes needed to fix a stubborn USB connection), it will fail unless it has the source files available. Extracting and running the installer from here eliminates this problem.
Now, uninstall the problem installation using the excellent uninstall guide again.
Now to install, right click on C:\WINDOWS\Options\BBDesktop42SP1\BlackBerrySetup. exe and select Run as Administrator to perform the install.
I'd turn off UAC (User Access Control) too - I can't live with it, and as far as it being a security feature, all it does is teach people to ignore warnings, and you can not be certain it's not screwing something up without telling you!