Fatal Error : Setup failed to install SMS Provider

Here are some pointers to resolve the issue:

-SPN registration for the SQL server is not done
-you have permission or other Kerberos issues with your machine accounts
-you don't have Domain Admin rights (it was one of the requirements from client) for sccm service account
-SCCM server is not the member of local administrators group of SQL server( in case of remote SQL server)
-SQL server instance may not necessarily be using the default port of 1433. 

For more info check this out: http://blogs.technet.com/mkleef/archive/2007/07/19/getting-sccm-2007-rc1-to-install-and-work-properly.aspx

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