If the installation program tells you it needs to update some system files and restart Windows, let it. You will need to restart the "setup" program after Windows comes back up.
If you try again and it gives you the same message about needing to restart Windows, then it was not able to upgrade the system files it wanted to. There are a number of possible explanations for this, all related to how it tries to upgrade the system files: What it does is leave copies of the files it needs to upgrade in the Windows "temporary" file folder, with instructions to copy them over the live ones before Windows starts. This will fail if it can't find those files in the "temporary" file folder when it restarts. This can happen if your "temporary" file folder is on a different drive than your "c:" drive, or if part of your computer's startup sequence deletes all files from the "temporary" file folder.
When the setup program says it needs to update system files, it has detected that one or more of a small list of files has an older version on your computer. This is possible even on very new computers, because my software uses updated versions of several files from Microsoft, which are not yet included in packaged versions of Windows.
All of the files it may install on your computer in this procedure are official versions of these files direct from Microsoft. I have not modified them in any way. Specifically, they are one or more of the following files included in Microsoft Visual Studio 6, service pack 4. Here is the list, if you are curious:
File Date and Time Size Version VB6STKIT.DLL 6/1/99 12:00:00 AM 101888 22.214.171.124 COMCAT.DLL 5/30/98 4:00:00 PM 22288 4.71.1460.1 STDOLE2.TLB 6/2/99 4:00:00 PM 17920 2.40.4275.1 ASYCFILT.DLL 3/7/99 4:00:00 PM 147728 2.40.4275.1 OLEPRO32.DLL 3/7/99 4:00:00 PM 164112 5.0.4275.1 OLEAUT32.DLL 4/11/00 4:00:00 PM 598288 2.40.4275.1 MSVBVM60.DLL 8/20/00 9:00:00 PM 1388544 126.96.36.199 MSVCRT.DLL 7/26/00 9:00:00 AM 295000 6.1.8637.0
In almost all cases, the only file it wants to update is the last one, MSVCRT.DLL.
The above list of files is current as of release 4.0.62 of the software. It may change slightly in later releases of the software, probably only in the dates, sizes, or version numbers, not in which files.
The setup program which wants to update these files was created by Microsoft Visual Basic.
I have never had a single report of a problem caused by allowing the setup program to update whichever files it wants in this procedure. I encourage you to allow it to do what it wants.