I will look into this.  But for the meantime, when it asks you for a server name, just type it in and don't drop down the list and see if the install will continue.

P   

Paul, I have seen this type of problem on named instances before as well.  Definitly a good place to look!  I do feel pretty confident that this go around is related to machine settings (or hardware) as it interacts with the threads in the process.