Ran into this issue today when trying to install the Microsoft Dynamics CRM 2011 for Microsoft Office Outlook where the installer would constantly ask for a reboot when trying to install “Microsoft SQL Server Express Edition 2008 (CRM)”. No matter how many times you rebooted it would always ask to reboot again. Note: This only happens if you use the “Offline” functionality.
The solution to this is to manually install Microsoft SQL Server 2008 R2 Express and call the instance “CRM”. This allows CRM to continue and skip over the installation of SQL Server Express.
Hope this helps others who get stuck with the install.