KB898461 install problems 2006 - Solution

Having spend loads of time to solve the above problem and ran over this
solution:

A missing registry subkey, FilesNotToBackup, seems to be a common cause
of
BITS-related errors in, primarily, Windows 2000 systems.

Open the registry editor and navigate to:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\BackupRestore
Expand the BackupRestore key, and see if a subkey called
FilesNotToBackup
exists. If not, then create that subkey under BackupRestore (ensure the

BackupRestore is highlighted as selected) by clicking on Edit>New>Key
The new key will be displayed with "New Key #1" highlighted. Key in
FilesNotToBackup so as to give the new key that name. Close the
registry
editor, then restart your computer. Now see if you can successfully
download
and install from Windows Update.