Quite a few users have had problems installing the SQL 2008 management tools - with an error message saying:
The SQL Server 2005 Express Tools are installed. To continue, remove the SQL Server 2005 Express Tools.
After lots of playing around, uninstalling/reinstalling, it seems the issue is related to Red Gate tools, such as SQL Prompt and SQL Compare.
First try and uninstall any Red Gate tools you have installed and see if that fixes the issue.
If it still fails after uninstalling them, you may have to search the registry for any orphaned keys relating to the Red Gate tools
It looks like these Red Gate keys go under SOFTWARE\Microsoft\Microsoft SQL Server\90\Tools\ShellSEM - so if you still have these keys after uninstalling SQL Prompt, manually deleting these should fix the problem.