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This error happens when opting in for compiling the scripts at
installation. (please note also that I did not selected "register
extension", but I don't think this has an impact).
Here is the text from event viewer:
Product: Python 3.0rc3 -- 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 CompilePyc, location: L:\Python30\python.exe, command: -Wi
"L:\Python30\Lib\compileall.py" -f -x
bad_coding|badsyntax|site-packages|py2_ "L:\Python30\Lib" 
Running the command manually indeed crashes, because of pipe symbol
being interpretted at shell level, not Python.
Please find attached a patch on Tools\msi\msi.py that addresses the
problem (untested, I don't have VStudio )

Thanks for the report. The problem was not with the quoting (this works
fine), but that test/crashers/iter.py failed to compile. Fixed in r67448.

Dear Martin,
It's my pleasure. I'm just sorry if I misled you a bit, but as I told I
haven't managed to have a full testing env yet ( although I'm close to it),
so I could not check in time if it would have fixed the bug.
Thanks for the great work.
Eric
2008年11月30日 Martin v. Löwis <report@bugs.python.org>
>
> Martin v. Löwis <martin@v.loewis.de> added the comment:
>
> Thanks for the report. The problem was not with the quoting (this works
> fine), but that test/crashers/iter.py failed to compile. Fixed in r67448.
>
> ----------
> resolution: -> fixed
> status: open -> closed
>
> _______________________________________
> Python tracker <report@bugs.python.org>
> <http://bugs.python.org/issue4407>
> _______________________________________
>