I ran an intense full system scan using Avast Free Antivirus (having updated to the latest program version & virus definitions).
No infections detected.
After that, ran a full scan with Spybot : Search & Destroy 1.6 (after updating it ofcourse!).
No spyware or malware.
I ran the check disk utility for my C: partition where Windows resides.
No errors.
I also ran 2 separate registry fixing utilities - Uniblue RegistryBooster 2 part of the Uniblue PowerSuite package & Registry Fix 6.
Detected problems with the registry but fixed them & rebooted the system with each of the 2 applications.
After doing all of the above, i tried installing Office 2003, but once again i got the very first error (regarding PIPFile).
This leads me to conclude that my Operating System has corrupted & perhaps there is no alternative but to re-install it, which is a very tedious task!
One peculiar observation though, i ran Uniblue RegistryBooster 2 yesterday night & today morning & on both occasions it detected problems even after i "fixed" them on the first instance.
Is this "normal"?
I reckon it is only Office 2003 that seems to be having an installation problem, i installed Registry Fix 6 & a few other applications without any hiccups.
Thank you all for your patience with my naive nature.