The reports of install problems began when the Release Preview version of the update rolled out on Wednesday, and have continued even after Microsoft released the same build to the Production ring late on Thursday. Many of those reports have been posted on Microsoft's support forum (via ZDNet) as well as our own Windows Central forums.
Jason from the Windows team did post this message on Thursday on Microsoft's forum:
Teams have dug into this issue and do believe the cause has been identified. The correct team is developing a fix/workaround and once we have the full details, we'll be posting that information. For your affected machines, there's no need to keep attempting the install. It'll keep failing. In the mean time, hold tight! We're all over this and will keep sharing information along the way.
Hopefully Microsoft will be able to correct this problem with the latest update. In the meantime, have you encountered this install problem? Let us know in the comments!