I also have this problem.  (2.5 msi installer under Win2K with a non-
admin account granted admin privs).  Python installs just fine under 
C:\ (instead of C:\Python25) but then I run into problems installing 
the win32 extensions.

Searching the web I found this posting from 2005
  http://mail.python.org/pipermail/python-list/2005-
September/341874.html

That poster created an SF bug report which is now issue1298962.  He 
linked to http://tinyurl.com/82dt2 which states:

    Windows Installler has no recognition of power
    users, so these users fall into the category of 
    "non admin" when running an install. 

That describes exactly my situation.  The solution is, apparently:

    To mark certain properties as safe for configuration,
    you can add them to the SecureCustomProperties list
    in the property table of the MSI file. 

which Martin reported here.  Martin suggested using orca, but I have no 
idea of what that is (unix/mac dweeb that I am), and it doesn't exist 
on this machine.

I know this is pretty much a "me too" report.  I'm doing so to say that 
it has been an ongoing problem here at my client's site.  They are not 
software developers here, and rather than trying to track down the 
right person with full admin rights to come to each person's desktop, 
they've been installing an old pre-msi version of Python.

I would like to see this fixed before 2.6 is released.  All I can do to 
help though is to test an installer, which I will do gladly.