Still in the middle of trying to fix this. Many hits on Google, I am not the only one who has this problem. The fact that XP sp3 is mentioned in many hits probably means that the problem is with this update in particular. One link indicated that the best thing might be to install SP3 separately; I have a vauge memory that I had the same problem with SP2. Here's the SP3 link, although it's not as good as I thought it was: http://forums.macrumors.com/archive/index.php/t-706018.html
One link indicated that it might be a failed update (likely in my case), and a tool called "Belarc Advisor" can be used to find and remove the failed update. That link was: http://www.techspot.com/vb/topic105237.html. I'm trying it out now, this seems like a very powerful program. Note: no failed updates found.
Several other links referenced common advice apparently stemming from M$ Knowledge base articles. This one forum dissected that advice particularly well: http://www.opentechsupport.net/forums/archive/topic/13061-1.html
This forum thread implicates a problem with M$ .NET 1.1, which it seems is what I have (no, I'm up to 2.0). It also provides a little bit of detail about Updater's dependence on activeX, which I've somehow crippled on this machine in some way: http://www.pcguide.com/vb/showthread.php?t=31205
