I had the same problem with that update and so are a lot of other people. Doing all of the help suggestions for the error code you get doesn't help. I found the solution through a google search. Download the Framework 1.1 SP1 from Microsoft then install it manually and it will work. I didn't keep the DL link to the file, but a little searching will turn it up. Found a
LINK.
Forgot to mention, that the next day, windows update wanted to install the same update again, so I let it do it and it worked fine.