"Windows Installer does not permit installation from a Remote Desktop Connection"

When you try to install an MSI through an RDP connection you could get the “Windows Installer does not permit installation from a Remote Desktop Connection” dialog. Everyone seems to think that the \tsclient<drive> is a regular network share.. but it is not!.. it’s a software feature of Terminal Services service. However, if you find yourself in the position where you must use the mapped drives for installing software, either copy the software first, or map the \tsclient<drive> first.

net use * \tsclient<drive>

then install from the network mapped drive.. seems the installer does not check the actual path to the mapped drive

more info> http://support.microsoft.com/kb/927063