Windows 2000 Error Message: Setup Cannot Create the Folder WinntTemp

“When you upgrade your Microsoft Windows 98/95-based or Microsoft Windows NT 4.0-based computer to Windows 2000, you may receive the following error message
Setup cannot create the folder windows foldertemp
where windows folder is either the Winnt or Windows folder. Also, after you receive the error message, the only available options are to click Retry or press F3 to exit.
This problem can occur if a file named “temp” is located in the Winnt or Windows folder.
To work around this problem, use the appropriate method:”