instmsia.exe (for WinNT/2000/XP) or instmisaw.exe(for Wi***/98/SE/ME) is the installer program for the Microsoft Windows Installer (compatible with the newest XP behavior).
It seems that this Windows component has been damaged, so this causes the error you have.
If the LimeWire installer cannot get it to work, than you should visit the Microsoft Windows Update web site, to reinstall some components (such as Internet Explorer or any new tool from Microsoft that uses this installer).
Note that the Windows Installer, opposed to most installer programs for Windows applications, is un updatable component. Its advantage is that each installed application can reuse the same installer program to register itself correctly on the system, so it saves megabytes of space on your disk, and it benefits from updated rules that make it work on many different situations, where as many installation programs have only be tested on much less types of configurations.
This installer is a licensed software from a commercial non-Microsoft installer, which has greater install functionalities than the limited Microsoft version: these functionalities only allow more scriptable actions within the installation script for specific applications, but the core components are the same.