You don't need to create multiple threads for the same topic. It just makes things more confusing.
The recovery disc from this website appears when booted to be just like a Vista disc with full capabilities, but it is ONLY for repair operations only on existing Windows installations that do not boot correctly. It cannot (re)install Windows. Clicking on the install Windows button would give you an error like you mentioned. You can only select "Repair My Computer" from the lower-left portion of the screen to get into the recovery enviornment.