There appears to be a problem with the install process for the 32 bit English version of Windows 7 RC Ultimate. The problem is described as the installer incorrectly setting the access control on the root system drive. The fix from Microsoft is described further as:

In the English version of Windows 7 Release Candidate (build 7100) 32-bit Ultimate, the folder that is created as the root folder of the system drive (%SystemDrive%) is missing entries in its security descriptor. One effect of this problem is that standard users such as non-administrators cannot perform all operations to subfolders that are created directly under the root. Therefore, applications that reference folders under the root may not install successfully or may not uninstall successfully. Additionally, operations or applications that reference these folders may fail.

For example, if a folder is created under the root of the system drive from an elevated command prompt, this folder will not correctly inherit permissions from the root of the drive. Therefore, some specific operations, such as deleting the folder, will fail when they are performed from a non-elevated command prompt.

The fix currently is being provided by Windows update. However, on their site Microsoft also has a manual fix available.

Comments welcome.

Fix from Microsoft is here.