C# Application install in Windows Emmulation....

You haven't given us any useful description of the actual problem, so this answer is a bit of a shot in the dark.

Maybe one of the computers has .Net Framework 4.5 installed, and the other only has 4.0? Apparently 4.5 has some fixes, and those fixes get applied to .Net 4.0 if the user has both installed. Not sure if you'd be targeting 4.0 though, as I'm not sure if Visual Studio 2008 can do that.

However, since you are in the lucky position that your user is having the problem inside a virtual machine, maybe you can have that user send you the virtual machine and you can run it locally. Not sure which VM environment they're using, so I couldn't begin to speculate on what conversion process may be necessary, but you can figure that out with some Googling I imagine (e.g., "vmware convert virtual machine from mac to windows").

If you can't solve the problem with random shots in the dark, maybe look into some logs? If the problem is with your code, put in some logging code (to log exceptions and such). And if the problem is with some tool you use (e.g., an installer package), Google to see if that has logs you can use. Then have the user send you the logs.

If you are really desperate, you can create a series of tests to nail down the exact problem. For example, create a simple installer for a "hello world" application. And maybe create a special build of your app without an installer (so it just runs from a folder). Anything you think may be the problem, create a small test app for it. Then have the user try each of those and report any problems to you. You can then use a process of elimination to figure out what your pain point is.

Oh, one last thought. I recently installed a VM, and I haven't been able to get it network access (at least, I can't get the internet... I can only access the internal company network). So it's possible it could be a network issue (e.g., if the installer "phones home" to verify an activation code).