March 16, 2006 
Attempting an upgrade from SQL Server 2000 to 2005 (Developer Edition) failed with the following error:
Error 1706. An installation package for the product Microsoft SQL Server Native Client cannot be found. Try the installation again using a valid copy of the installation package ‘sqlncli.msi’.
After a bit of research I found that because I was installing from "D:\SQL Server x32\Servers" it was unable to locate the files because I had previously installed it from "D:\Servers\"
My simple solution to this problem was to issue the following command at a command prompt:
subst E: "D:\SQL Server x32"
Now my E: drive used by the installation would match the directory structure when the upgrade was run. The following events occur in the log showing the result:
MSI (s) (D4:D8) [04:46:04:182]: SOURCEMGMT: Processing media source list.
MSI (s) (D4:D8) [04:46:05:224]: SOURCEMGMT: Trying media source D:\Servers\setup\.
MSI (s) (D4:D8) [04:46:05:224]: Note: 1: 2203 2: D:\Servers\setup\sqlncli.msi 3: -2147287037
MSI (s) (D4:D8) [04:46:05:224]: SOURCEMGMT: Source is invalid due to missing/inaccessible package.
MSI (s) (D4:D8) [04:46:05:224]: SOURCEMGMT: Trying media source E:\Servers\setup\.
MSI (s) (D4:D8) [04:46:05:224]: Incrementing counter to disable shutdown. Counter after increment: 0
MSI (s) (D4:D8) [04:46:05:224]: Decrementing counter to disable shutdown. If counter >= 0, shutdown will be denied. Counter after decrement: -1
MSI (s) (D4:D8) [04:46:05:224]: SOURCEMGMT: Resolved source to: ‘E:\Servers\setup\’
MSI (s) (D4:D8) [04:46:05:224]: PROPERTY CHANGE: Adding SourceDir property. Its value is ‘E:\Servers\setup\’.
MSI (s) (D4:D8) [04:46:05:224]: SOURCEMGMT: Trying media source D:\Servers\setup\.
MSI (s) (D4:D8) [04:46:05:224]: Note: 1: 2203 2: D:\Servers\setup\sqlncli.msi 3: -2147287037
MSI (s) (D4:D8) [04:46:05:224]: SOURCEMGMT: Source is invalid due to missing/inaccessible package.
MSI (s) (D4:D8) [04:46:05:224]: SOURCEMGMT: Trying media source E:\Servers\setup\.
MSI (s) (D4:D8) [04:46:05:224]: Incrementing counter to disable shutdown. Counter after increment: 0
MSI (s) (D4:D8) [04:46:05:224]: Decrementing counter to disable shutdown. If counter >= 0, shutdown will be denied. Counter after decrement: -1
MSI (s) (D4:D8) [04:46:05:224]: SOURCEMGMT: Resolved source to: ‘E:\Servers\setup\’
MSI (s) (D4:D8) [04:46:05:224]: PROPERTY CHANGE: Adding SourceDir property. Its value is ‘E:\Servers\setup\’.
I was able to successfully upgrade my SQL Server database….nice.
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