Question
When I attempt to run our .MSI, I recieve the following message 'Error 1316. Network connect failed'.

Answer

There are some reasons as to why this may be occurring:

1.  This could be caused from having a property with the same name as a directory key.  Search for the name listed in the error by selecting 'Find' from within the Tables tab in the Setup Editor.  This will find the offending directory or property that needs to be modified. A directory cannot have the same name as a property in an installation. 

2. In one case a customer reported that changing the Media option to uncompressed files, corrected the behavior for them.