Just a couple of thoughts
Make sure that Dreamweaver is not running during the install.
Always uninstall an extension before re-installing.
Start from a fresh reboot with minimal programs running in the background before install new software to avoid potential problems.
Allow plenty of time for things to complete. Sometimes it looks like nothing is happening for long periods of time. (Extension Manager is not the finest piece of software ever written)
Clear the temp folder (start run %temp% delete all files that the system lets you delete in that folder, ignore the rest)
BTW: complements to you for such a clear description of your system and what you tried. :)
