Just a few months back at the office we tried this and it doesn't work on our network. We wanted to be very clear if it was possible to update under a few conditions.
1. Fresh install of XP (in our case, no service packs.)
2. Try to connect to our WPA2 WiFi.
Both failed. We had to not only more drivers but SP2 before Windows Update would function.
I didn't read where you installed all the drivers for your machine.
Bob
Had corrupted XP on old computer after years of use. Formatted disk; reinstalled from MS disk. Clean install of XP SP2 with IE6. No antivirus, no firewall, no programs not on XP release disk. Attempted to run MS update and got error message which equated to 404.
(This actually second attempt. First time, I didn't format, got same problem, and thought problem was related to residual software on the disk. 2nd time I did full reformat.

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