For anybody that had a hard time understanding this, as I did, here's a detailed explanation!
This can be fixed easily. For some reason, newer versions of windows have a difficult time downloading the C++ 2005 version. Matlab offers a 2008 version but it is not set as the default. To make it the file to download, you need to locate your temp files created by MatLab that stores the files for installation. (Just copy and paste destination location you chose when you downloaded the installation program from MatLab's website into your file explorer). Once you do this, click on the folder named bin, then the folder named v90. There should be two files. Copy these. Then go back to the bin folder. Paste the two files. (you will be prompted to replace the files, do so.) These two files are C++ 2008, rather then C++ 2005. Now locate the setup program, which should be located in the same folder you pasted the two files to. It SHOULD download C++ 2008 instead. Which is exactly what we want!! I also noticed after the program installs, when opening MatLab C++ 2005 tries to install again. I run win 8, but i went into my program files, located the bin and vc90 folders, and repeated the process. Now MatLab runs like a champ! Hope this helps anybody else with the same problem. Figured I share the solution so you could share it as well.