Here are a couple of things to try:
1. Check the installation log files, located at %Program
Files%\Microsoft SQL Server\90\Setup Bootstrap\LOG\Files for more
details on the error. (Search for the text string "value 3" to get to the failed log)
2. Try to add the service manually to the local groups using the Computer Management Admin tool. Then re-run setup.
Thanks,
Sam Lester (MSFT)
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