Evidently Amazon has served a defective installer for the last few months, but someone has thoughtfully kept the old one and made it available.
I had this problem and the old installer fixed it (on my Win 7 PC).
http://www.kindleboards.com/index.php?PHPSESSID=704lvnd5gd9s14ssbdpi6lqq83&topic=50810.msg982185#msg982185This is a link to a post about the problem and its solution, not a direct download. Download link is in the post though.