This happens on file that is within a domain. From what I have seen so far this only happens with users that log in from a domain.
This solution is simple go to the following registry location in regedit:
HKEY_CURRENT_USER/Software/Microsoft/Windows/CurrentVersion/Explorer/User Shell Folders
Here you should change the personal registry key:
•from \\<domain>\profiles$\<username>
•to %USERPROFILE%\<username>
Note that User Shell Folders may exist in other locations as well, so you can search in the registry editor for User Shell Folders and correct all values you find, depending on your personal installation.
Then try to reinstall the program.
Another option is to create a new Admin User on your computer and install it that way.
http://superuser.com/questions/258239/error-1325-username-is-not-a-valid-short-file-name
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