There are a number of things that can break Windows Update in Windows XP, including performing a repair/reinstall. For a fix, try these next steps:
Open Notepad or WordPad and copy/paste the following text:
Save the file to your desktop as UpdatesFix.cmd (you'll have to click the "Save As Type…. Dropdown arrow on the right of the selection window and select "All Files" before you click the Save button).
If you'd rather not try the batch file, you can enter each line in the Run box one at a time and click OK after each one.
Double-click the UpdatesFix.cmd file; a command window will open, and you'll see a series of dialogue boxes saying DLLRegisterServer in *.dll succeeded. Click OK to step through the process.
Once all the dll's have been successfully reregistered visit the Windows Update site and try the Windows updates again to see if it works correctly.
Often you will have to download and install Windows Installer 3.1 and the Windows Genuine Advantage tool before you can download any more updates.
Windows Installer 3.1
Redistributable (v2) For Windows 2000 Service Pack 3; Windows 2000 Service Pack 4; Windows Server 2003; Windows XP; Windows XP Service Pack 1; Windows XP Service Pack 2
An update for Windows Installer 3.1 is available for Windows Server 2003 SP1 and for the 64-bit editions of Windows XP
On rare occasions, a reregister will fail; in such cases, run sfc /scannow (have your OS CD handy) and then try again.
This was all quoted from bbearren
at Tech Support Guy Forums