I had the same problem when trying to install PSP X4 on Windows 7 getting "The device is not ready" message. I got it to install by doing the installation in Windows 7 Safe Mode. Here's how:
Start pc in Safe Mode by repeatedly clicking f8 during startup (or whatever method works on your pc).
It is necessary to start Windows Installer Service and Protexis Licensing V2 Service manually when in Safe Mode.
1. Start Windows Installer Service using safeMSI or command line:
Download and run safeMSI.exe here:
http://www.windowsitpro.com/article/tip ... safe-mode-
OR run this at the command line in Safe Mode:
REG ADD “HKLM\SYSTEM\CurrentControlSet\Control\SafeBoot\Minimal\MSIServer” /VE /T REG_SZ /F /D “Service”
2. Start service Protexis Licensing V2 by entering this at the command line in Safe Mode:
REG ADD “HKLM\SYSTEM\CurrentControlSet\Control\SafeBoot\Minimal\PSI_SVC_2” /VE /T REG_SZ /F /D “Service”
Click on setup.exe on Paintshop Pro X4 installation disk and proceed with installation.