Strange problem I am having with Windows Update

After installing IE 7.0 on all my systems - installing by downloading the
installation executable locally on each machine - I am able to run Windows
Update on all my systems using either an express or a customized scan. I am
shown the available updates. However, I am only able to review or select and
then intall any critical or high priority updates. If I try to review any
optional hardware or software updates that are available, rather than having
a list of the optional updates appear in the view pane for me to review or
select, a new instance of Windows Update is displayed in the view pane
asking if I want to run an express or a customized scan. In effect another
instance of Windows Update is being run. This happens if I try to run
Windows Update from IE 7 or from the Windows Update link in the Start Menu.

I have one system running Windows Server Standard with SP1 wtih all updates
as of late October and two XP Pro SP2 systems both with all updates as of
late October. I don't want to use automatic updates and had no trouble with
Windows Update until installing IE 7.0.

Does anyone have any suggestions as to how I fix this, or has anyone even
heard of this problem?

JDC