Think there was a similar problem a while back with an update, MS had to pull it and rebuild it before it would work automatically. Manual update should work for all users.
Just to add though..... it fails on pirated copies of XP or copies that are running patched TCPIP files..... as well as failing for no reason lol. Think the standard XP/ XP PRO file may need replacing on the Auto Update site but if you are running a patched TCPIP file or a slightly dubious copy of XP you stand a good chance of it failling.... it will however download and install manually
