I have the same problem! And I'm running a brand-new, legal, expensive, clean-installed copy of XP Professional - because I thought the problems were caused by my previous - er, gift copy x)
It downloads the updates but won't install them. I've followed microsoft's advice to re-run various install executables, restarted endless ****** times when prompted ..... and the darn thing just hangs when it comes to installing. Also seems to be blocking updates for other programs, although I've reduced security to a pathetic minimum.
I've used 4 different programs to check I'm not harbouring a bug. What to do now????!!!!!
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