Error during install: "Cannot add SQL Server service login 'LocalSystem' to the Archive Manager Exchange Admin group"
The SQL server where the Archive Manage database is installed runs under local system account. As this account exists only on local machine it cannot be granted any permissions on remote machines or be added to any domain group.
To resolve this problem you need to change SQL service account from the local system account to a domain account, then run setup again.
The only situation when you can ignore this message is when you have both SQL server and Archive Manager service accounts on the same box.