MS has "fixit" files to address this. In addition, if the fixits don't work, they have a procedure to clear your temporary updates folder when/if it has become corrupted.
I have an issue with Windows Update in XP. I recently reinstalled XP on a Dell Vostro 1700. No issues there except when trying to update the machine. The install went fine and the first batch of 130 or so updates installed perfectly. Now when I run Windows Update it will find updates to install and when I try to install them they all fail immediately with no error given.
I've tried just about everything online:
1) Register DLL's
2) Stopping and starting the windows update service
3) Third party software designed to reset Windows Update
And a bunch more and nothing works. Anyone have any suggestions?