800706BE
Make sure your Anti-Virus is disabled and attempt the update again, if this still fails try updating in a clean boot environment:
Test in a Clean Boot
http://support.microsoft.com/kb/929135
Click Start, type msconfig in the Start Search box, and then press ENTER. (If you are prompted for an administrator password or for a confirmation, type the password, or click Continue.)
On the General tab, click Selective Startup.
Under Selective Startup, click to clear the Load Startup Items check box.
Click the Services tab, click to select the Hide All Microsoft Services check box, and then click Disable All.
Click OK.
When you are prompted, click Restart.
Log back into your Account.
Click Start -> All Programs -> Windows Update, and reinstall the update/s.
To restore your Normal startup:
Click Start, type msconfig in the Start Search box, and then press ENTER. (If you are prompted for an administrator password or for a confirmation, type the password, or click Continue.)
On the General tab, click Normal Startup.
When you are prompted, click Restart.