I had one computer that I figured was just brain dead (I still think it is) and was never able to get to the bottom of why updates wouldn’t install on it. I was blaming the computer (and it’s previous owner). Well, I just experienced the same problem with another XP computer that prompted me to aggressively try and find an answer.

I found the following on Tech Support Forums:

I suggest you try this workaround for Windows Update issues…
How to Repair the Windows Update Files.
1. Go Start > Run.
2. In the box type REGSVR32 WUAPI.DLL > Enter.
3. A message saying, "DllRegisterServer in WUAPI.DLL succeeded" will appear > OK.
4. Now it is necessary to repeat these steps for each of the following files commands:
Hit Enter after each line
REGSVR32 WUAUENG.DLL
REGSVR32 WUAUENG1.DLL
REGSVR32 ATL.DLL
REGSVR32 WUCLTUI.DLL
REGSVR32 WUPS.DLL
REGSVR32 WUPS2.DLL
REGSVR32 WUWEB.DLL
Once finished; since the temporary folder of Windows Update may be corrupted, please carry out the following steps to rename the folder:
1. Go Start > Run > in the box type cmd > Enter.
Type the following command in the open panel.
net stop WuAuServ
(Please Note: the computer may need to be rebooted before the net stop command will work.)
2. Go Start > Run > type in the box %windir% > Enter.
3. In the opened folder, rename the folder ( by Right clicking) SoftwareDistribution to Sdold.
4. Go Start > Run > type in cmd > Enter. In the open command pane, please type:
net start WuAuServ
Once that’s done, Go Start > All Programs > Windows Updates and see if it will allow the downloading/installation of Windows Updates.

This seems to have resolved the problem on the newer computer that was exhibiting this problem and so I thought I would share this with the world (of people that actually read my blog). Now to go attempt this on the lame computer we are using for our postage/shipping system… Wish me luck!