In addition, a review of the update history (click on "Review your update history" in the left side gray stripe) showed no failures at all.
I had even checked the system event logs and come up empty.
In my case, this debugging information proved critical.
A Microsoft technician responded to my plea for help well within their 24 hour goal.
Good news: Microsoft offers free technical support for Windows Update and that support provided a solution to my problem.
While consumers are conditioned to call their hardware manufacturer for technical support, Microsoft offers free support for Service Pack 3 for Windows XP, IE7 and Windows Update.
This thread, XP SP3 Preventing any other Windows Update Installs, started almost 3 months ago.
The thread includes an email from Microsoft technical support with three possible fixes.Finally, let me repeat a warning about upgrading to Internet Explorer 7.When you first install IE7, you get a known buggy version.Support for SP3 and IE7 is offered on the phone (866-234-6020), although, I had Windows Update in IE6 and IE7) and click on the "Get help and support" link in the gray stripe on the left. The best way to do this is with Internet Explorer on the computer with the problem.This allows Microsoft to download an Active X control that gathers assorted debugging information and sends it back to them.Update: A reader named Joseph pointed out that this is from an older version of Windows Update.(July 27, 2008) But the other log file, "Windows Update.log" is a gold mine of information (this file has no spaces in the name).