I was assisting a vendor with a software update at a client site that required .NET 3.5 SP1. An error keep popping up (“remote user install not available”) when I attempted to install .NET 3.5 SP1.  RGBRast was listed as the problem child. I looked at group policy as many web post suggested.

(Computer Configuration: Administrative Templates: Windows Components:Windows Installer) (Disable Windows Installer) Set to "Disable"

The group policy was not set so I went ahead and disabled the setting to see if it would help, but it did not.

After researching more I found that with .NET 3.0 and up, the RGB Rast msi appears to be configured to do a per-user install, rather than per-machine. The server had the "Prevent per-user installs" Group Policy enabled which would cause the install to fail, preventing .Net 3.5  from installing. [more]

I modified the registry value

Key: HKLM\Software\Policies\Microsoft\Windows\Installer
Value: DisableUserInstalls
Data: 1

And was then able to complete the .NET 3.5 SP1 installation as well as the database / program upgrade.