Thank you for your thoughtful help, donziehm! I am sorry for my delayed response, but I needed to reconstruct a history of my Win Update problems (getting progressively worse over more than 3 years) and condense it down to something readable. It includes extensive troubleshooting by Microsoft Tech Support, but with only limited success at best.
I know my Windows Update function is 'buggered'. First warning signs were in June '07 when I would select updates directly from Microsoft Updates site: during the D/L phase, the Progress Bar would remain EMPTY during the entire D/L for some of the updates selected. But the Install phase would always work perfectly; I began to accept the empty PB's as normal, as long as the updates installed OK. [Note: 2 months later, Event Viewer began reporting 'BAD BLOCKS' for my HDD. I ran CHKDSK to repair 'em, and then replaced the HDD, and Restored a Ghost image from late July. The image seemed to work great - but was it perfect, given my HDD may have been degrading when imaged?]
In Jan '08, Automatic Update's Tray icon (the method I would use to get Win Defender Definition Updates) began to act intermittent. Because of my slow Dial-Up connection, I configure AU to 'Notify', and let AU work in the background when I OK it to D/L. Worked smoothly until Jan '08, when the AU Tray icon would sometimes disappear from the Tray after I OK the D/L. Randomly, the AU icon would re-appear and resume the D/L, but it could again drop out at anytime or it could pop-up the 'ready to install'. At this time, to answer your question, donziehm, the only 100% reliable way I could get my updates was to bypass Automatic Updates by launching my browser directly to 'Microsoft Updates' web site - this would work flawlessly. I only had download interruptions when AU was D/L'ing Updates in the background via BITS.
In March '08, Microsoft Tech Support tried to troubleshoot my "intermittent AU D/L" problem. Actions included:
* Recreated ...\Catroot2\ and ...\SoftwareDistribution\
* Ran Regsvr32 tool to re-register DLL's in the Registry
* Deleted everything in C:\Windows\TEMP and \Prefetch\ folders
* Sent 'em my WindowsUpdate.log
* Ran 'Microsoft Product Support Reporting Tool for Network' (MPSRPT_NETWORK.EXE) so MS can see my system configuration in detail, hopefully leading to fault isolation.
* Reset the Winsock Catalog and sent report to MS.
RESULT: On 4/16/08, Microsoft GAVE UP! "No sign of file corruption found, per parity check. All files look clean. We find that 70 to 80% of the time, removal of 3rd party FIREWALL (i.e. Symantec) fixes the problem".
Unhappy with this fruitless result, I sent my MS Tech the following on 4/22/08:
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"Final customer critique of the subject case:
While I appreciate whatever effort the team at Microsoft Windows Technical Support made in this unsuccessful effort, I feel it necessary to disagree with Microsoft's theory of the 'possible' Cause.
I must take exception with Microsoft's conclusion that appears to hold the Microsoft Windows XP Operating System blameless, while limiting 'Cause' to a competitor's product and/or an "Internet connection issue". Based upon all the exhaustive testing I have done in this matter, along with all I have carefully documented to Microsoft, it is clear to me that both my Symantec firewall (a component of Norton AntiVirus), and my Broadcom V.92 56K modem and it's connection to the same ISP for nearly the past 4 years, are all performing flawlessly.
Completely missing from your Final Disposition is any reference to Automatic Updates, the only Win XP function that malfunctions with intermittent download of Updates. Direct access to 'Microsoft Updates' via my IE7 Browser always results in complete, uninterrupted downloads -- and this is always successful with my full Symantec firewall protections enabled and the same 'Net connection configuration I always use.
Why Microsoft has not tried to distinguish what programming code makes Automatic Updates (Notify) unique compared against a User's direct-Browser access to Microsoft Updates remains a mystery to me. Clearly, they behave differently. Without such analysis, it is little wonder a root-cause was not achieved at Microsoft. To then cast blame on a competitor's product is especially disappointing, and not justified, based upon any proof that I have seen.
I shall continue to regard the root-cause of this download malfunction in Automatic Updates as strictly limited to an undiagnosed flaw in Microsoft Windows XP Home Edition."
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Donziehm, your reply included Win Update issues related to Win XP SP3; the pbcomp.com article you linked seems to relate more to a complete failure to get Win Updates. This has never been my problem - in fact, after I installed SP3 on 6/14/08, AU D/L's worked perfect. But only for about 1 month, before the 'intermittent AU' behavior returned.
My workaround since then has been to use AU only to 'Notify' me Update(s) are available. If it's Win Def Definitions, I launch Windows Defender --> 'Check for Updates' - works perfect. If it's a 'Patch Tuesday', I launch Microsoft Update and do it as a dedicated application. This worked well until 6/10/09 -- THE FIRST TIME I SAW ERROR CODE 0x80070005 when running Microsoft Update. Again, it's hit-or-miss - some updates D/L and install just fine. Never had a problem with MS Office 2003 patches nor "Cumulative Security Updates for IE8". It's the "Security Updates for Win XP" and "Update for Win XP" that are batting .500 or less. With great reluctance, I again reached out to Microsoft in August 2009, since BOTH AU and now MS Update (with the frequent Error Code 0x80070005) are 'buggered'.
In addition to the gauntlet they ran me through in March '08, they also had me D/L and install SubInACL.exe, a tool to reset the Permissions, much like the eggheadcafe.com article you linked me, donziehm - except I don't have to dick around in the Registry (I've used regedit on occasion - but I'm never comfortable doing it!). Again, the result in Aug. '09 was little improvement in MS Update and none for AU. My workaround to this date has been to temporarily disable the Norton security functions during MS Update. As my initial post indicates, even disabling my NIS 2010 is spotty in helping MS Update.
Donziehm, I apologize this reply is so long. You certainly must have the patience of a saint if you're still reading. But I am grateful for your help - THANK YOU VERY MUCH - I don't know where else to turn in this frustrating matter. Perhaps repeating some of the old corrective actions from MS will help, at least marginally. I don't know. What's a mother to do?