OK, I've been tearing my hair out with this error. Seemingly tried everything to get Bioshock to just start up. I believe I've found the solution.
I'm assuming that these errors are unique to Vista owners. I myself have Vista Home Premium 32 bit. Attempts to install the vcredist.msi as directed in the support forums had previously failed with an error message saying something like:
The feature you are trying to use is on a network resource that is unavailable. Click OK to try again, or enter an alternate path to a folder containing the installation package blah blah blah.msi etc etc.
Here's what I did to fix this side-by-side configuration error.
1) Go to http://support.microsoft.com/default...b;en-us;290301 and download the Windows Installer Cleanup Utility.
2) Install the utility
3) Run it via the Start menu, should list itself as above.
4) A list of installed programs should appear. Search out the C++ redistributable entry, and click on the button to uninstall it.
5) After a successful uninstall, open up the Bioshock DVD under the VS Redist folder and extract vcredist_x86.exe to the desktop. An aptly named folder should be there.
6) Right click the .msi file and install.
7) This should finally install properly and you're ready to run Bioshock.
Some possibly important settings:
From previous attempts to get Bioshock running, I have made a couple changes to the Bioshock shortcut, namely:
1) Compatibility is set to Win XP
2) User level is set to administrator.
I've heard of AVG causing problems with the install and running of Bioshock related to this error. I have AVG running with Resident Shield Protection turned off. This should probably be off prior to the install.
Good luck, it's a great game so far!