I had the same problem with 2 Updates . Here are the instructions from a  Microsoft Tech:
First search and delete the WUTEMP folder or remove the contents in that folder. 
1. Close any windows you have open.
2. Click on Start, then My Computer
3. Open the C drive
4. Open the Windows folder
5. Open the System32 folder
6. Find the CatRoot2 folder and right-click on it, and select RENAME. Change the name to CR2OLD. Make sure you hit Enter after typing in the new name, so the changes can be saved.
7. Close this window. Restart your system and try the Update site again to install the update.
Norma J. Ols

Norma
  ----- Original Message ----- 
  Date:    Sun, 7 Mar 2004 02:42:34 -0500
  From:    Allen Spencer <[log in to unmask]>
  Subject: Windows Update Repeat
  Hello Listers,
  Maybe someone can tell me what's going on here.  Every day while I'm online I get  a prompt from the Windows Update site urging me to download the Windows Security Update 823559.  Sometimes I get prompted to do this two or three times per day. I must have downloaded and installed this thing about ten times already.  Why does the update prompt continue?  When I check my Update History it shows the number of times it has been installed so I don't think it's a fake.
  TIA
  Allen Spencer

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