A common error when upgrading or installing CRM 2011:

This error can be resolved by modifying the existing SQL server installation. From Control panel, click add/remove programs, click on SQL Server installation, change/ add features. You will be prompted for the original install media so make sure you have it mounted and avaiable. Select add new features to SQL instance, choose instance that CRM was installed on, and check the box for Full-Text indexing.

The SQL wizard will run some checks and apply your changes. Once completed, Now start and stop SQL service, and make sure to turn back on the SQL Agent (it’s turned off during installation changes). Re-run your CRM setup by pressing back and next, and both errors will go away! Enjoy!