Several users are reporting this error:

This same error was fixed in a previous update with a workaround described here. However, this can be caused by user error (downloading the wrong updater or wrong language), but most likely it's caused by modifying files as described here. This includes modifying Office files as well as your OS file like removing languages. running Monolingual or Safari fix.
Fix if you have modified files:
- Quit all applications (Easy way: log out/in with Shift key down to disable any startup items.)
- Drag the Microsoft Office 2008 folder to the Trash.
- Empty Trash.
- Reinstall Office 2008 from your original installation disk. (see below for details***)
- Restart
- Update to 12.1.0 (SP1)**
- Restart
- Update to 12.1.1
- Restart
- Run Repair Permissions from Disk Utility.
** Be sure you have logged in with Shift key down to disable all startup items. Quit all applications before updating.
***After installing from the original install disk, the AutoUpdater will want to update itself. Let it update. When you see the AutoUpdater in the Dock, select to "keep in Dock" for the install process. Do not update further. Restart then run the AutoUpdater to let it install SP1. Restart then use your installer for 12.1.1 (this is not yet available through AutoUpdate). Restart.
(you can remove AutoUpdate after this process)
After you are updated:

You can download the script to show this info here. Be sure to get the correct version for Office 2008.

Comments (9)
Oddly, there is no such tips article for people who just installed the regular Office 2008, modified nothing, and are still getting this error.
Easier to blame user error, though, ain't it?
Not that it isn't par for the course for the disappointment that is Entourage 2008.
This is not an official Microsoft site. You really should send feedback to Microsoft.
Send feedback to Microsoft.
When working in Office, you can use the “Send Feedback” option under the Help menu in all of the Office applications or visit
http://www.microsoft.com/mac/suggestions.mspx
Just had the same problem after using monolingual to strip out unwanted language files and code. However, after spending a few minutes looking at the update package I have been able to find an effective solution that does not require reinstallation. Here goes:
1) Download the 12.1.1 update directly from Microsoft's Mactopia website.
2) Mount the downloaded DMG file and copy the installer to your desktop.
3) Right-click the installer and select "show package contents"
4) Navigate to Office 2008 12.1.1 Update/Contents/Resources/package_updatable and open the file in TextEdit
5) Scroll to the bottom and find the line "found_valid_version=False"
6) Change False to True
7) Then delete all the text below until the start of "if not found_valid_version:" Making sure that line is not deleted!
8) Close the window, it will ask if you want to overwrite the file. Say yes.
9) Close the finder window and then run the installer like normal.
Hopefully it should then work. Seems the problem was with the checksum - by deleting that the installer goes without a problem.
Hope you find that useful!
[Added comment by Diane: Use with extreme caution! Ran this past the developer and received this back: The issue is the checksum. I cannot endorse this workaround, however...]
Andrew Murton:
You're frickin' brilliant! Your workaround took all of 30 seconds and 12.1.1 installed like a charm...
Thanks a million.
No, it didn't work... maybe the real alternative is buying and start using iWork 08... After all I bought iMac because I was sick and tired of Vista and Office 2007!
Thank you anyway... another $150.00 wasted!
Before you just give up, try this procedure:
Quit all applications (Easy way: log out/in with Shift key down to disable any startup items.)
Drag the Microsoft Office 2008 folder to the Trash.
Empty Trash.
Reinstall Office 2008 from your original installation disk. (see below for details***)
Restart
Update to 12.1.0 (SP1)**
Restart
Update to 12.1.1
Restart
Run Repair Permissions from Disk Utility.
** Be sure you have logged in with Shift key down to disable all startup items. Quit all applications before updating.
***After installing from the original install disk, the AutoUpdater will want to update itself. Let it update. When you see the AutoUpdater in the Dock, select to "keep in Dock" for the install process. Do not update further. Restart then run the AutoUpdater to let it install SP1. Restart then use your installer for 12.1.1
You can see the exact steps with screenshots here:
Install Office 2008
Andrew Murton's above solution for 12.1.1 also works for 12.1.2. I had the same problem, followed his steps and installation of 12.1.2 was successful.
Andrew Murton's solution worked for me (12.1.2) on my g5 Mac. Thanks!
Andrew Murton's solution worked perfectly for me as well. Many thanks, Andrew!