Nevermind, i got it thanks to ES_Paragon
First make sure you have all the latest updates for vista. Then reboot your computer and click start (or the vista button) , select run, type %temp% then click ok. That should open up the windows temp folder, delete all the files (that you can) from there and close the folder.
Next check the following. For XP
1. Right-Click the start button and select "Explore"
2. Navigate to the "All Users" directory, then "Start Menu", then "Programs"
3. Look for a folder named "Microsoft Games" if it does not exist create one.
4. Then in that directory, check for a folder named "Age of Empires III" again if it does not exist create it.
For vista:
1. Right-Click the vista button and select "Open All Users"
2. Navigate and open the to "Programs" folder
3. Look for a folder named "Microsoft Games", if it does not exist create it
4. In that directory, create another directory called "Age of Empires III"
Once you have verified those folders exist, or created them, close those windows and try once again to run the setup.exe on TWC disk.
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