Windows XP forum: Windows updates won't install after XP service 3 installed

I took my brand new Dell Inspiron 530 Windows XP Professional Quad Core Q6600 out of the box on May 30 directed Windows Updates to download and install updates immediately. These installed fine:

Security Update for Microsoft .NET Framework, Version 1.1 Service Pack 1 (KB928366)
Windows Malicious Software Removal Tool - May 2008 (KB890830)
Windows Internet Explorer 7 for Windows XP
Security Update for Microsoft .NET Framework, Version 2.0 (KB928365)
Security Update for Microsoft .NET Framework, Version 1.1 Service Pack 1 (KB928366)
Security Update for Windows XP with Windows Media Format Runtime 9.5 and 11 (KB941569)
Windows XP Service Pack 3 (KB936929)
Windows Genuine Advantage Validation Tool (KB892130)
Update for Windows XP (KB898461)
This one would not install:
Security Update for Windows XP (KB888302)

On June 2, I installed Microsoft Office 2007 Home and Student edition. My Windows updates are set for daily automatic install but nothing is updating even when I go to the windows update website and do an express install.. The following updates have downloaded but failed to install on several occasions with the following error message which I got again today.

Problem: A problem on your computer is preventing updates from being downloaded or installed
Solution: To fix the problem, try installing the updates again. If that doesn't work, use the Troubleshooter to try solve the problem.
Microsoft Office 2007
Security Update for the 2007 Microsoft Office System (KB947801)
Security Update for Microsoft Office Excel 2007 (KB946974)
Update for the 2007 Microsoft Office System (KB946691)
Security Update for Microsoft Office Word 2007 (KB950113)
Security Update for Microsoft Office system 2007 (KB951808)
2007 Microsoft Office Suite Service Pack 1 (SP1)
Microsoft Windows XP
Security Update for Windows XP (KB951698)
Cumulative Security Update for ActiveX Killbits for Windows XP (KB950760)
Security Update for Windows XP (KB950762)
Security Update for Windows XP (KB951376)
Security Update for Windows XP with Windows Media Format Runtime 9.5 (KB923689)
Cumulative Security Update for Internet Explorer 7 for Windows XP (KB950759)
Needless to say, the Windows website is worthless as far as explaining how to fix this mess. I notice a google search reveals others having similar problems.
HELP !!!!!!!! Any suggestions how to fix this would be appreciated. The computer is fast and runs fine.