If you are deploying the application per-computer, then the computer account
(or at least the Domain Computers group) has to have permissions to read the
MSI from the share. You can enable software installation logging by checking
downloading my GP logging ADM at www.gpoguy.com/tools.htm. The generated log
will tell you why its failing to install, if its a problem with the SI
policy processing process rather than a problem with the MSI.
MS MVP-Group Policy
Group Policy FAQs, resources tips and utilities at www.gpoguy.com