This error came up when I tried to install the newest Flash player for Internet Explorer. Here’s the fix. In Window XP open a command prompt and type:
secedit /configure /cfg %windir%\repair\secsetup.inf /db secsetup.sdb /verbose
Press Enter. Reboot the computer, reinstall Flash.
Sources: (highly recommend reading)
http://answers.microsoft.com/en-us/ie/forum/ie8-windows_other/activex-control-for-flash-player-10-1-could-not-be/b038c4fb-42a9-4483-ae16-98930dd5d706