How to deploy .exe using Software installation GPO

I've never encountered that issue but I have deployed Acrobat Read 9.1 by GPO exactly how you describe and worked great.

I am using Windows XP PRO SP3 & IE 7 on all workstations. Not sure if you're browser has something to do with it, I didn't see the version you used.

As a thought, try it without the transform see if works (just use the MSI). Then if it does work, create basicly a blank transform And then add one option to the transform at a time until it breaks.

To speak to Flash Player in particular: You can obtain an MSI from Adobe through a licensing program. Have a look at: http://www.adobe.com/products/players/fpsh_distribution1.html

I regularly install Adobe Reader, Flash, Apple QuickTime, and others using GPO-based installations. When new versions are released, I deploy the new versions as mandatory upgrades.

You should take some time to learn about Windows Installer and building your own packages. You can use repackaging tools, but the best results, in my expereience, come from learning how to use tools like WiX (http://wix.sourceforge.net/) to create your own packages from the ground up. Repackaging tools create "dumb" MSIs that don't necessarily do what the original SETUP author wanted. An intelligent human repackager tries to learn what the SETUP author wanted to do and creates a package that does that.

At the very least, you need a tool like ORCA allow you to create Transform files (MST) for existing packages, and enough of an understanding of Windows Installer to allow you to intelligently create MST files.

I've had really good luck with managing software this way. It's been a big win with my Customers for efficiency, and has been a great differentiator of my services. I highly recommend it.