Upgrading to Windows Server 2003 R2 - Setup cannot run in program compatibility mode

I was trying to upgrade one of my Windows Server 2003 to Windows Server 2003 R2 but was struck with an error message just when I started the install.

Setup cannot run in program compatibility mode. To run Setup normally, go to My Computer, double-click the CD icon, and then double-click the Setup.exe file.

Didn’t I just do that?  Following the instruction in the error message will not get me anywhere and here is how to get rid of this error.

Click on Start and click on “Program Compatibility Wizard”.

Click Next on the Welcome screen.

Select “I want to use the program in the CD-ROM drive” since my Windows Server 2003 R2 setup files are on the CD.  Click Next to continue.

Select “Do not apply a compatibility mode” and click Next.

Just click Next to continue.

Select “Allow non-administrator to run this program” and click Next.

Click Next.

Select “Yes, set this program to always use these compatibility settings” and click Next.

To choose Yes or No is up to individual’s preference.  Click Next to continue.

Click Finish.

And my upgrade went through smoothly.