1008MsiInstallerThe installation of C:\WINDOWS\Installer\236249.msp is not permitted due to an error in software restriction policy processing. The object cannot be trusted.
We got this problem when trying to install the Microsoft Visual Studio 2005 SP1.
This problem appears because of a (in my opinion) design fault in the Microsoft Installer, which is unable to verify a digital signature when the installer file is too large.
Following the instructions in the Microsoft KB article solved the problem for us. However, we had to change the domain controller group policy, and not the local group policy since this was being installed on a domain controller.
Also note that you will have to wait a little while before the policy will be activate, you do NOT have to reboot.