Failure to update (XP w/SP1) unisatalled SP2

I am helping a friend update XP his Gateway laptop, SP1 was installed. There
has been intermittent problems over the past 2 months getting SP2 and all
other updates to install. I downloaded SP2 to a CD and it installed fine. I
am unable to install any updates via the Windows update site. The update
starts normally but times out with very vew packets sent or recieves. There
is no error code displayed just "Installation Failure".
I have run SpyBot and AdAware and Norton anti-virus, all are up to date as
of today, and found nothing obvious. There seems to be a problem with the
WU/IE6 interface as when I try to view the installation history I get
cascading page images inside each other when I click on the next>> or 12-30
hyperlinks at the bottom of the list.
I have tried reinstalling Windows from the recovery disk and still no help.
I have tried uninstalling SP2 and other updates and still cannot make WU run.