Access is denied during initdb

I'm attempting to install PostgreSQL v8.0.3 on a Windows XP SP2 machine.
The error log below is generated and the installation rolls back. I
have verified that the "postgres" user (service account) has
read/write/execute permissions to the entire C: drive as well as having
the "logon as service" right enabled. What's missing?

The files belonging to this database system will be owned by user
"postgres".
This user must also own the server process.

The database cluster will be initialized with locale C.

fixing permissions on existing directory C:/PostgreSQL/8.0/data ... ok
creating directory C:/PostgreSQL/8.0/data/global ... ok
creating directory C:/PostgreSQL/8.0/data/pg_xlog ... ok
creating directory C:/PostgreSQL/8.0/data/pg_xlog/archive_status ... ok
creating directory C:/PostgreSQL/8.0/data/pg_clog ... ok
creating directory C:/PostgreSQL/8.0/data/pg_subtrans ... ok
creating directory C:/PostgreSQL/8.0/data/base ... ok
creating directory C:/PostgreSQL/8.0/data/base/1 ... ok
creating directory C:/PostgreSQL/8.0/data/pg_tblspc ... ok
selecting default max_connections ... Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
10
selecting default shared_buffers ... Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
50
creating configuration files ... ok
creating template1 database in C:/PostgreSQL/8.0/data/base/1 ... ok
initializing pg_shadow ... Access is denied.
child process was terminated by signal 1
initdb: removing contents of data directory "C:/PostgreSQL/8.0/data"