Please ensure that the requirements in this link have been met http://msftdbprodsamples.codeplex.com/wikipage?title=Database%20Prerequisites%20for%20SQL%20Server%202008R2
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MSysDev (C.Sturt), MDbDsgnMgt (C.Sturt), MCT, MCPD, MCSD, MCITP, MCDBA
Blog: Mr. Wharty's Ramblings
MC ID: Microsoft Transcript
I installed SQL Server 2008 R2 with Advanced Services Service Pack 1 and that solved the problem. Thank you for your suggestion though.