Why does the ODBC-ODBC Bridge install fail with "Setup is unable to locate the layout file"?

A more complete version of this error is:

Setup is unable to locate the layout file 'C:\Temp\pft2D~tmp\Layout.bin' which is needed to complete the installation.
Error 112.

The error indicates that the environment variables InstallShield needs to unpack an ODBC-ODBC Bridge distribution are set incorrectly. InstallShield cannot therefore find the temporary directories it needs. To solve this problem, use Control Panel > System > Environment Variables to change Temp and Tmp to point to drive\temp and drive\tmp, (Make sure these directories exist.) Use the OK button to save your changes and exit the dialog boxes.