Phillip Tejada offers a potential workaround for users who are having problems installing Mac OS X 10.3.x Security Update 11-04-03:
"Remove the file TokenDefinitions.plist from the installer package. It will run fine without it. This file tells the installer to go lookin
g for Terminal instead of just updating /Applications/Terminal.app"
Some readers have reported being able to work around this problem by unmounting any volumes other than the startup disk before proceeding with installation.
The 11-04-2003 security update is rolled into Mac OS X 10.3.1, so if the incremental upgrade applies properly, there is no need to apply the standalone security updater.