I had recently downloaded android-studio-bundle-135.1641136.exe
in anticipation to upgrade to faster development from my earlier environment of Eclipse. However, when in tried installing the executable it gave "Unable to elevate error" and exited the installation process without giving any further troubleshooting information.

Note: I have a Windows 7 Ultimate Service pack 1 running on HP Pavillion DV6000, 2.5 GB RAM

Based on the message I thought that probably its related to some permission issue so I tried the following step by step and tried installing after each step which eventually succeeded at the final step.
Changed the unblock settings in the properties of the files (for some reasons I don't see the property window many times.)
Run the exe as "Administrator".
Changed the UAC settings from the control panel to the lowest level "Never Notify".
Even after following all the above steps I was still getting the error "Unable to elevate error"and I was totally perplexed at the behavior of the program and was wondering "How can Google can do such a mess?". Well, that wasn't a possibility so started to figure out who else was possibly messing around.
Next I checked the SHA-1 hash to ensure the program is not corrupted and found it to be matching as on the Google site.
Finally, I had a doubt on the friendly Avast Anti-Virus program's invisible hand in all this mess and so I disabled it for 10 minutes and started the android installation exe and Voila! it ran and showed its beautiful face.
Moral of the story : If you are getting "Unable to elevate" error even when you are executing as a "administrator" then probably you need to disable your anti-virus program for sometime to let the installation to happen.

Actually figured it out.. stupid but I had to run the android-studio-bundle-135.1641136.exe by right clicking and doing "Run as administrator". Hopefully this will help someone else that runs into the similar issue!