Do you nave Norton on that Windows install by any chance? If so the error is caused by that. You might have to do a inplace upgrade also known as a repair install.
How to Perform a Windows XP Repair Install
Also have you tried to use a Restore point from before the updates were installed?
Windows XP System Restore Is Easy to Use
How to Perform a Windows XP Repair Install
Also have you tried to use a Restore point from before the updates were installed?
Windows XP System Restore Is Easy to Use