Network Magic isn't supported anymore. The application has been discontinued. There is no way to install it or use it. However, you can apply a compatibility tweak. Right click the setup package and select Properties > Compatibility and choose Windows XP Service Pack 3.
Even if you manage to install it, the software will require activation, but that won't be possible since the activation servers are not working anymore. I have encountered the same error as you, and still haven't found a way to activate it.
