Did you install SHCE to a folder off the root C: and not into Program Files??
Should look like this:
C: Hard Drive
C:\GAMES
C:\GAMES\SILENT ......... #2. below:
- (graphic from subsowespac.org)
You should be starting SHCE by using DOSBox. Did you double check the settings and try to install SHCE again?
That is a strange error message I have not heard of before. So many have succeeded installing to Vista, Win 7, and even Win 8.x. I would try the install again.