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Just what I love at 4pm on a Friday afternoon, finding a undocumented requirement for a product while sitting in front of the client. Anyway, it appears that the location of the MSCRM Monitoring (what ever that is, I found this by checking the install logs) is set in the installer to C:\Program Files regardless where you put MSCRM itself. Even worse is that it is not <System Drive>\Program Files, it is C:\Program Files. I have NO C: on this box (dunno why, but thats what IT provided).
I suspect you can work around this by creating an unattended installation (see the implementation guide for creating the XML files for that), but I'm actually lucky enough to have an empty second drive I can change the drive letter to C (using disk manager).

Add to this that nothing actually appears on C: once I fixed the issue (assuming it is checking for something, and that is failing and thus the issue). So all that I have left to do is:

AARRRRRGGGHHHHHHH