Why can’t I install Worms Armageddon on Windows 7

Could this be the same type of issue that affects other RTS games?

Try closing Explorer.exe either before running the game, or right after it starts.

Here is a question that is asking about older RTS games: How do I get an older Windows 95/98 game to run in Windows 7 64-bit without some colors looking off?

Wow! Haven't heard of this game in a while. If you're going to play it though, grab Fleet Operations as it brings the game up to modern standards (in graphics and gameplay). It will require your disk but it has a custom installer that works (last i checked anyway) on windows 7.

If you're sure that you want to play the game stock, open the CD manually in explorer, then go to the Setup folder and launch Setup.exe with administrator rights (i suspect you may have been launching the autorun program as administrator instead).