In Windows XP Pro, I recently ran into a problem where Windows Update wouldn't install any updates.  It would load and show that it wanted to install 'Microsoft Windows Installer 3.1' and 'Windows Genuine Advantage Validation Tool (KB892130)', but would always fail when it tried to do the update. 

A Google search found this post, where the writer recommends re-registering the DLL's needed by Windows Update.  It worked perfectly for me! 

Here are the instructions, shamelessly copy/pasted from the original post:

To repair this problem the dll files associated with the windows update program have to be registered.  To do this you'll need to run regsvr32.  Go start then run:

• regsvr32 wuapi.dll
• regsvr32 wuaueng.dll
• regsvr32 wuaueng1.dll
• regsvr32 wucltui.dll
• regsvr32 wups.dll
• regsvr32 wups2.dll
• regsvr32 wuweb.dll