Before installing project server 2007 few things must be installed.

1. IIS 6.0
2. .Net Framework 2.0 and ASP.Net 2.0 Enabled on the IIS
3. Windows Workflow Foundation Beta II 2.2 must be installed on the machine.
4. If you are installing on the virtual server it must be part of any Domain or Active Directory. And you must be login using the active directory account. (You can create a VM with Active Directory and then make it domain controller for the second VM)
5. Run project server setup
6. The setup will automatically install WSS Version 3.0 and Project server 2007.
7. When project server setup will finish. SharePoint configuration wizard will run and create all the sites that are required e.g. Windows SharePoint site and PWA.
8. You still need to check the PWA URL from SharePoint central administration – > Shared Services -> Project Web Access Sites Page.

I hope your project server be installed in the first attempt. It seems that beta II does not work for first time so best of luck.

Jerry