KB835732 fails to install

I have attempted to use microsoft update to install KB835732 several times.
Each time has failed.

I DLed it manually and went into safe mode to install and got this error:

"Setup can not copy the file msgina.dll
Ensure that the location specified below is correct, or change it and insert
'Windows XP Hotfix Source Files' in the drive you specify."

It gives me the option to 'retry' 'cancel' and 'browse'

Even though it shows in add/remove programs, I dont think its getting
installed properly. The absense of this update is preventing me from DLing
other updates (like SP2) and my PC is very unstable. Its not something i can
simply ignore.

I have scoured this newsgroup and have tried pretty much every fix posted.
It just seems my problem with KB835732 is a tad different than everyone elses.

Running a fresh install of XP on a brand new hdd.

Thanks in advance.

My KB835732 log says this:

"Windows XP has been partially updated and may not work properly. It is
recommended that you use your Emergency Repair disk to repair your system.
To do this, insert the Windows XP Setup Boot Disk into the floppy drive,
restart your computer, and then select the Emergency Repair option.
***

Update.exe extended error code = 0xf00d"

Problem is, this wont work for me. I am running a SATA raptor through a pci
card. So when I reboot from CD, it cant 'find' my hard drive to repair it.

Any ideas?