Symptoms

Installation of client components fails at Installation Health:
Invalid character in the given encoding. Line 130, position 17.

This consequently results to the error below when opening K2 Studio:
The string parameter 'fileMap.ExeConfigFileName' cannot be null or empty.
Parameter name: fileMap.ExeConfigFileName
 

Diagnoses

Installer trace was pointing to C:WindowsMicrosoft.NETFrameworkv.2.0.50727CONFIGmachine.config. Opening this file on Notepad and running the XML Tool plugin to check if the XML is valid threw the same error as above:
"Invalid character in the given encoding. Line 130, position 17."
 

Resolution

Removed the invalid characters and re-ran a repair on the setup manager