I would try to run the SP1 installer in compatibility mode. To do this right click on it and click properties. Then go to the compatibility tab check the "Run this program in compatibility mode for:" and select either Windows XP (Service Pack 2 or 3) or Windows Vista (with any or no service packs). Then click apply and run the installer. If that doesn't work, write me back. When Windows says "Your color scheme has been changed to Windows 7 Basic" it just means that FSX doesn't support the theme you are using (probably Windows 7 Aero) and it will be changed back when you exit Flight Simulator. Nothing to worry about there!
