If you heard anything about the 'secret updates' Microsoft pushed out to XP users over the summer, that is the cause of your woes. Thankfully Microsoft has publicized a quick fix in their Knowledge Base, which can be found by clicking here. Follow the instructions and you should be able to download/install all of the updates successfully.
Hope this helps,
After doing a repair reinstall on my windows XP computer, I was confronted with the need to reinstall updates. However, when the windows update program goes to install, it automatically switches to the "Failed to install" screen, with all the updates present. This happens with the windows update site as well. This started from the Microsoft Windows Installer 3.1, and persists for every update.
I can successfully install all of these updates manually, though. However, faced with the prospect of installing hundreds of updates (and every update after) by hand, does anyone have any ideas?