It looks like you have successfully removed the MSI traces of an existing installation because you have seen the full installation dialogs and not the upgrade / update dialogs.
The EXE version of the UltraEdit installer does not require the installation of MSI installer v4.5 in comparison to the MSI version of the UltraEdit installer. MSIEXEC v4.5 is by default not installed on Windows XP, just on Windows 7 and Vista. Although it should not be necessary, you can download and update MSI to v4.5 (most likely from v3.1). Download free Microsoft Windows Installer 4.5 Redistributable
(switch to Italian before download) and install it.
I found also following Microsoft article You receive an "error 1603: A fatal error occurred during installation" error message when you try to install a Windows Installer package
. Check and follow the solutions Microsoft describes in this article.
If the UltraEdit program files directory is not encrypted, is not on a substituted drive (subst command used) and SYSTEM has full control on the directory, the error code 1603 is not enough to find out the reason. Please open start menu, click on item to execute something, enter eventvwr.msc
and click on button OK. This opens the event viewer of Windows. Look into the event protocol for the applications. You should find there the MSI installer error. Double click on this error event, use the third button on right side to copy the full description of the event to Windows clipboard and paste it here. You can also click on the link to get help directly from Microsoft database and perhaps find out the reason for the error by yourself.