Error 1931 when trying to install WinSyslog Beta

Hi techyv!
I am using a Basic MSI project. My application requires msxml3.dll. I have included xml3 in merge modules.
Whenever I tried to install my application I got the following error message:

Error 1931. The Windows Installer service cannot update the system file c:WINDOWSSystem32msxml3.dll because the file is protected by Windows. You may need to update your operating system for this program to work correctly.”
Even I tried on a freshly installed Windows 2000 and Windows XP but for the sake of nothing.
I will be highly grateful if someone can sort it out for me.
Thanks.
