I'm trying to install Steam from an msi file. (file can be downloaded at http://storefront.steampowered.com/download/SteamInstall.msi )

I am installing to an empty default sandbox with drop my rights enabled.
I am starting windows explorer sandboxed and then right clicking on SteamInstall.msi and choosing install.

I get multiple messages from Sanboxie:
SBIE2214 Request to start service 'MSIServer' was denied due to dropped rights
SBIE2219 Request was issued by program SandoxieDcomLauch.exe [DefaultBox]
SBIE2214 Request to start service 'MSIServer' was denied due to dropped rights
SBIE2219 Request was issued by program SandoxieDcomLauch.exe [DefaultBox]
SBIE2214 Request to start service 'MSIServer' was denied due to dropped rights
SBIE2219 Request was issued by program SandoxieDcomLauch.exe [DefaultBox]

Followed by this error message by Windows Installer:
The windows Installer Service could not be accessed. This can occur if the Windows Installer is not correctly installed. Contact your support personnel for assistance.

==========
If I reconfigure the sandbox to not use DropMyRights (and empty the sandbox) and start over (starting explorer sandboxed and then right clicking the .msi file and chooseing install), I get:
1. A security warning (do you want to run this file). I choose Yes.
2. The installer starts.
A. The welcome page, (click Next)
B. License Agreement (click Next)
C. Connection Speed (click next)
D. Language (English, click next)
E. Destination Folder (C:\Program files (x86)\Steam\ click next)
The install starts and I immediately get this error:
Windows Installer (sandboxed): The system administrator has set policies to prevent this installation.

I see these programs running in the sandbox:
SandoxieRpcSs.exe
SandboxieDcomLauncher.exe
explorer.exe
SanboxieCrypto.exe
msiexe.exe [#] Steam setup [#]
msiexe.exe

As soon as I click the OK button on the windows installer error message, the "msiexe.exe [#] Steam setup [#]" disappears from the sandboxie control, leaving the other msiexe.exe still running. When I close explorer.exe, all the programs close in the sanboxie control.

What do I need to do to install Steam on Sandboxie on a Windows 7 64 bit machine?

FYI, the same msi file install just fine on windows XP using sandboxie 32 bit.

First login in account with admin Rights. That is if you have multiple accounts. if you have one you already are in such account. Skip this step.
Then in Sandboxie menu select Start as UAC Administrator.

Install the .msi in sandbox.

If you have multiple accounts and you followed the first step, you can freely relocate the sandbox folder.
Eg you have
Sandbox\adminAccount\Steam
you can move it to
Sandbox\standardAccount\Steam

That does not work.

When I start with an empty sandbox and have drop my rights disabled, and right click on the SteamInstall.msi file and choose Start Sanboxed, and then check Run as UAC Administrator, I get this error:
Sandboxie Start
Could not invoke program:
"C:\users\dsmelser\desktop\steaminstall.msi"
System error code:
%1 is not a valid Win32 application (193.)

When I do this with the resource access monitor enabled, this is what it reports:

snipped. --tzuk

Sandboxie control reports that
Start.exe; sandboxieRpcSs.exe, and SandboxieDcomLaunch.exe are running.

As I'm sure you are aware, 64-bit Sandboxie still has some problems. I will try to reproduce the problem and see if I can fix it.

Thanks for looking into this.

This is fixed in version 3.43.16. The problem was related to elevation, which happens just after you click the Install button.

I installed the .16 version.

When When I start with an empty sandbox and have drop my rights disabled, and right click on the SteamInstall.msi file and choose Start Sanboxed, and then check Run as UAC Administrator, I get this error:
Sandboxie Start
Could not invoke program:
"C:\users\dsmelser\desktop\steaminstall.msi"
System error code:
%1 is not a valid Win32 application (193.)

However, If I start over and started a sandboxed copy of windows explorer.exe, I can then run the steaminstall.msi program. So this is a step forward.

But as I run steam and try to install a demo game, I get multiple Sandboxie Start error dialog boxes. All say:
"Could not invoke program:
+
System error code:
The system cannot find the file specified.
(2)"

Would I need a Steam account to reproduce this problem?

This occurs for me with nearly any type of administrative rights on sandboxxie. 64 bit win7

This exactly describes the problem I'm having with Windows Script Host (wscript.exe).

To reproduce:

1. Create a new javascript file with the contents: WScript.Echo("Test.");
2. Create a new sandbox and ensure that "Drop rights from Aministrators..." is disabled.
3. Using an admin user account, run the javascript sandboxed with the "Run As UAC Administrator" option. Sandboxie Start (start.exe) gives me the error dsmelser quoted above:

This error does NOT occur when "Run As UAC Administrator" is unchecked. Tested on Windows 7 x64 with Sandboxie 3.44.

Found a workaround for running .js files as UAC admin. Instead of right-click > Run Sandboxed, I used "Run Any Program" in Sandboxie control to run: wscript "C:\Users\mike\Desktop\test.js"

(This changes the current directory for the script, I think, so paths may get screwed up.)