Recently, my IT guys upgraded all the workstations with windows 7 and at the end of all this I again had to install each of the CRM to bring my machine up and running for further development.
Then I started installing CRM 6.1 for one of the client and at very first stage got stuck with incompatibility error. I searched through all related documents and found this version of CRM is not compatible with latest operating system i.e. Windows 7 or 8. I was in the situation where I had to setup the system for development task. Hence I decided to do a compatibility mode installation. Right clicked on the Setup.exe file and selected Troubleshoot Compatibility option.
After selecting this option I could install the CRM properly and till now it works fine :)..Fingers crossed!!