I ran in to this a while ago and did it again now so I thought I would share it here. There is a hotfix for Windows Installer which solves a problem when for instance a windows 7 computer needs to self-repair an windows installer based installation and the source files are located at the Configuration Manager 2012 distribution point and is accessible via HTTP.
Title: “HTTP Error 401.1″ error message when Msiexec.exe updates an MSI file in Windows Vista, in Windows 7, in Windows Server 2008, or in Windows Server 2008 R2”
Assume that you deploy an application to a client computer that is running one of the following operating systems by using System Center Configuration Manager 2012:
•Windows Server 2008
•Windows Server 2008 R2
When the deployment of the application is finished, the Microsoft Installer Package (MSI) file is removed from the local drive. Then, the ConfigMgr client updates the MSI source list by accessing the content server. This behavior is controlled by the self-healing functionality. When the self-healing functionality is triggered, Msiexec.exe tries to access the content path anonymously instead of by using the credentials of the user who currently logs on the client computer. However, the Secure Windows Initiative (SWI) guidelines do not allow anonymous access to content servers. Therefore, you receive the following error message:
The full article can be found here: