The way to solve this problem is to clear all proxy setting in your IE, sorry for the Chinese version, but I’m sure that you know how to arrive this window.
Perhaps MS will solve it in the future.
You can also refer to this link http://www.liveside.net/2010/06/25/essentials-installer-waitforcatalog-error-workaround/

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2 users responded in this post
this also happens when i was installing windows live essential 2011 on windows 7 in our company.
already tried your solution, any other one?
test
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