Just got a chance to play a bit with such system, where grubinst.exe fails to write bootsector on NTFS formatted partition.
OS is Vista 32bit SP2.

CMD is run as administrator, writing grub4dos MBR to the same disk is successful, so is writing BS to FAT32 partition on the same disk:
QUOTE
C:\Users\mute\Desktop\files\grub4dos>grubinst -v -l (hd1)
Partition list
# id base leng
0 0C 3F 7AFFC1 (3936M)
C:\Users\mute\Desktop\files\grub4dos>grubinst -v (hd1,0)
Start sector: 0x3F
Image type: FAT32
Install mode
C:\Users\mute\Desktop\files\grub4dos>
Grub4dos bootsector is written indeed.
Changing "optimize for removal" / "optimize for performance" did not help.
I have never experienced such behavior on XP SP2/3.
Any help with this, please?