Got the problem solved.I emailed Archie and he got back to me in record time!

I'll post here in detail in case anyone else has the same issue.
A while back I had tried to upgrade to the .NET version. I'd started the installation, but it failed as I did not have SQL Server 2005+ running (only 2k).
The settings.xml file was still on the computer, and this caused problems. I deleted it, and tried installing again. I was prompted to select a SQL Server instance, chose the 2008 R2, and tada! Installation successful!
Thanks again to Archie for the lightning fast answer!