Hutch Systems Service : Knowledge base article #264
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Windows XP Repair Completed - Unable to Perform Updates
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First step is to register dll files which may have been dislodged in the repair or upgrade to service pack 2.

1. Re-register the Windows Update DLL with the commands below
Click Start, click Run, type cmd, and then click OK.
Type the following commands. Press ENTER after each command.

regsvr32 wuapi.dll
regsvr32 wuaueng.dll
regsvr32 wuaueng1.dll
regsvr32 wucltui.dll
regsvr32 wups.dll
regsvr32 wups2.dll
regsvr32 wuweb.dll
regsvr32 MSXML3.dll

Attempt to run Windows Update

If that fails then procede to step 2

2. Check permissions on the Windows Update registry key
Click Start.
Choose Run.
In the Run box, type REGEDIT.
Click OK. The Registry Editor opens.
*WARNING*
Using Registry Editor incorrectly can cause serious problems that may require you to reinstall your operating system. Microsoft cannot guarantee that problems resulting from the incorrect use of Registry Editor can be solved. Use Registry Editor at your own risk.
Navigate to the following key: HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\WindowsUpdate.
On the menu, click Edit. Click Permissions.
For Administrator and System, select the Allow check boxes next to Full Control and Read permissions. NOTE: In certain instances, these check boxes are grayed out. Ensure all accounts have appropriate permissions.
Click Apply.
Click OK.
Close the Registry Editor.
Restart the system.

Attempt to run Windows Update

If that fails try step 3.

3. How To Reset Security Settings Back to the Defaults
http://support.microsoft.com/kb/313222/ Link contents:
To reset your operating system back to original installation default security settings:
1. Click Start, click Run, type cmd, and then press ENTER.
2. Type secedit /configure /cfg %windir%\repair\secsetup.inf /db secsetup.sdb /verbose, and then press ENTER. You receive a "Task is completed" message, and a warning message that something could not be done. You can safely ignore this message. For more information about this message, view the %windir%\Security\Logs\Scesrv.log file.
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