Is there something odd about your setup? The profile paths in the log suggest that the user profile is "hotdesk1" but in one place in the log, the Username is reported as "shvtest". (This may be a red herring, but worth asking just in case)
Do you have any java runtimes installed?
Is your installing account a local admin?
Have you copied the install files to a folder on your desktop? If so, can I suggest trying the install from a CD source, or at least move the folder to the root of C: to reduce the path length.
On computers that run IIS 7.0 or later, the following IIS role services must also be installed: ASP.NET, CGI, and IIS 6.0 Management Compatibility.
The smaller of the logs suggests that the check for SEPM required services fails, but does not explicitly state which ones are missing.
That's all I can suggest, apart from the obvious step of reading the documentation and checking that any system pre-requisites are present on your test box.