Today I was trying to install Vista on my home machine (to play around with a dual boot/vmware hybrid setup) when I ran into the following error:
"Windows is unable to find a system volume that meets its criteria for installation"
It turns out that I just needed to set the partition that I was installing to as active. Since you’re already working with the Vista installer, the easiest way to do this is to first press F8 as the installer starts running. This should bring up a DOS prompt where you can use the diskpart program to set the partition to active. To accomplish this, run diskpart in the DOS prompt. Then use the "List Disk" command to figure out which disk you want, followed by the "Select <DISK NAME>" command to select that disk. Next repeat the previous step with "List Partition" and "Select <PARTITION NAME>" to select the partition you want to make active. Finally, just use the "Active" command, and like magic the Vista installer should stop with its complaining.
Now you just need to hope that the disk you’re installing from doesn’t have any errors; as you may know, the Vista .iso is notoriously difficult to burn.
The following thread has more information: