I encountered a problem at work the other day that I thought might be worth mentioning. After a fresh Windows XP SP2 install, I ran Windows Update and installed the SP3 update. After that, every single update that I tried to install would fail. At first I thought I had messed something up myself but after a little googling I found that this is a known issue and Microsoft address it here.
Two methods are mentioned and I opted for the second which involves downloading the Windows Update Agent and installing it from the command line with the "/wuforce" option.