Installing CRM 2011 on Windows Server 2012 requires to use the Microsoft Self healing Process – manual patch that you download from the Windows Catalog. I searched all over and had a hard time finding it. Thanks to my good friend Corey Hanson at Microsoft for providing a direct link to the patch. The patch is listed on the KB article under manual installation, but its a bit unclear for those looking for the Self Healing Patch.

http://catalog.update.microsoft.com/v7/site/Search.aspx?q=Setup%20Update%20CRM

Once you download the patch, add this to a directory on the CRM server. You will then run a command line install of CRM 2011 in order to have the installer use this patch. The CRM 2011 setup program will be updated upon release of Update Rollup 14, no longer requiring this manual patch for installing on Windows Server 2012. Instruction on how to create the configuration file and use the patch can be found here:
Example Sample Config.XML File – Save as XML – Do not save as TXT and rename.
 

Running from the command line:

Some more Gotchas:
Apparently, your must expand/unzip this file on a Windows 7 or Windows 8 machine, and then copy it over to the Windows 2012 Server. I kept getting messages that this patch will not work on this application and the serversetup.log file stated it was an invalid windows installer package.

Once I expanded (you can extract via right click too!) on my Windows 8 machine, and copied it over, everything worked like a charm.  This should save some people a few hours of scratching their heads..

Enjoy!