Recently confronted a very annoying situation wherein said update (from the title) looked like it was installing on an XP Professional machine then it would fail. (See Microsoft Update Screenshot) Please save yourself a lot of trouble. The fix that worked for me is available at http://support.microsoft.com/kb/976982. Forget the other steps and repair the .NET Framework. You will have to run a cleanup tool which they provide a link for. Warning: this approach although it ultimately solved the problem does not come without fallout. Specifically, consequences relating to Privacy Icon Client (Picon) AND Lenovo Power Background Monitor error messages. You will have to re-get (so to speak) .NET Framework 1.1, .NET Framework 1.1 Service Pack 1 (SP1) and .NET Framework 3.5 SP1. This link would not work, I had to go to the main Microsoft Update page and go under optional updates. Once .NET 3.5 was installed, issues related to Picon and Lenovo ceased.
I am not certain, but around the time this all ensued, N360 deleted something in line with update.exe. Maybe this was a false positive? (See Norton deleting something screenshot) Anyway, I know Microsoft knew about issues germane to this update, however, could Norton having deleted that file led way to the subsequent failure? I can only introspect. Before I go, I should note also that after getting the so-called optional .NET 3.5 (which ameliorated other issues as I have documented them) when you go back to Windows Update, you will notice that your system needs a whole truckload of updates as I highlight in the screenshot entitled, “KB951847 led way to all these updates.”
Have a good day,
H.B.