I was having a similar error, except my machine would re-boot in the middle of the install. This is what my log looked like:
Error 1722.There is a problem with this Windows Installer package. A program run as part of the setup did not finish as expected. Contact your support personnel or package vendor. Action patchjre, location: C:\Program Files\Common Files\Java\Update\Base Images\j2re1.4.2-b28\patch-j2re1.4.2_05-b04\patchjre.exe, command: -s "C:\Program Files\Java\j2re1.4.2_05\"
It turned out to be an issue with the video driver and dual displays. I was installing on a Dell Latitude 600 using 2 monitors. After installing the latest driver my problem went away. It has something to do with Jdk 1.3.4 is now using Direct X.
Hope this helps someone out there.......................