links were of no help
Here's the update log:
2011-04-18 13:42:36:303 1216 f50 Agent ** END ** Agent: Finding updates [CallerId = wusa]
2011-04-18 13:42:36:303 1216 f50 Agent *************
2011-04-18 13:42:36:305 3568 848 COMAPI >>-- RESUMED -- COMAPI: Search [ClientId = wusa]
2011-04-18 13:42:36:324 3568 848 COMAPI - Updates found = 1
2011-04-18 13:42:36:324 3568 848 COMAPI ---------
2011-04-18 13:42:36:324 3568 848 COMAPI -- END -- COMAPI: Search [ClientId = wusa]
2011-04-18 13:42:36:324 3568 848 COMAPI -------------
2011-04-18 13:42:38:752 1216 e94 DnldMgr *********** DnldMgr: Copy update to cache [UpdateId = {06F194CC-5843-4003-88DF-9AEA91660591}.501] ***********
2011-04-18 13:42:38:752 1216 e94 DnldMgr Asking handler to generate non-range requests.
2011-04-18 13:42:38:753 1216 e94 Handler Generating request for CBS update 06F194CC-5843-4003-88DF-9AEA91660591 in sandbox C:\Windows\SoftwareDistribution\Download\0409fb4cb385f81b5bd579b8c8b6fe76_ctc
2011-04-18 13:42:38:753 1216 e94 Handler Selecting self-contained because update does not have express payload.
2011-04-18 13:42:38:753 1216 e94 Handler Selected payload type is ptSelfContained
2011-04-18 13:42:38:753 1216 e94 Handler Detected download state is dsStart
2011-04-18 13:42:38:753 1216 e94 Handler Adding windows6.0-kb2503658-x86.cab (entire file) to request list.
2011-04-18 13:42:38:754 1216 e94 Handler Request generation for CBS update complete with hr=0x0 and pfResetSandbox=0
2011-04-18 13:42:38:763 1216 e94 Misc Validating signature for C:\Windows\SoftwareDistribution\Download\0409fb4cb385f81b5bd579b8c8b6fe76_ctc\windows6.0-kb2503658-x86.cab:
2011-04-18 13:42:38:787 1216 e94 Misc Microsoft signed: Yes
2011-04-18 13:42:38:788 1216 e94 DnldMgr Asking handler to generate non-range requests.
2011-04-18 13:42:38:788 1216 e94 Handler Generating request for CBS update 06F194CC-5843-4003-88DF-9AEA91660591 in sandbox C:\Windows\SoftwareDistribution\Download\0409fb4cb385f81b5bd579b8c8b6fe76_ctc
2011-04-18 13:42:38:788 1216 e94 Handler Selecting self-contained because update does not have express payload.
2011-04-18 13:42:38:788 1216 e94 Handler Selected payload type is ptSelfContained
2011-04-18 13:42:38:788 1216 e94 Handler Detected download state is dsHavePackage
2011-04-18 13:42:38:789 1216 e94 Handler Request generation for CBS update complete with hr=0x0 and pfResetSandbox=0
2011-04-18 13:42:38:815 3568 bd8 COMAPI -------------
2011-04-18 13:42:38:815 3568 bd8 COMAPI -- START -- COMAPI: Install [ClientId = wusa]
2011-04-18 13:42:38:816 3568 bd8 COMAPI ---------
2011-04-18 13:42:38:816 3568 bd8 COMAPI - Allow source prompts: Yes; Forced: No; Force quiet: No
2011-04-18 13:42:38:816 3568 bd8 COMAPI - Updates in request: 1
2011-04-18 13:42:38:816 3568 bd8 COMAPI - ServiceID = {66682469-BB86-45B6-9209-1776926FD90D} Third party service
2011-04-18 13:42:38:820 3568 bd8 COMAPI - Updates to install = 1
2011-04-18 13:42:38:820 1216 b0 Agent *************
2011-04-18 13:42:38:820 3568 bd8 COMAPI <<-- SUBMITTED -- COMAPI: Install [ClientId = wusa]
2011-04-18 13:42:38:820 1216 b0 Agent ** START ** Agent: Installing updates [CallerId = wusa]
2011-04-18 13:42:38:820 1216 b0 Agent *********
2011-04-18 13:42:38:820 1216 b0 Agent * Updates to install = 1
2011-04-18 13:42:39:056 1216 b0 Agent * Title = Security Update for Windows (KB2503658)
2011-04-18 13:42:39:056 1216 b0 Agent * UpdateId = {D8531BC9-9813-4BC4-AA5E-8667EC7C164E}.501
2011-04-18 13:42:39:056 1216 b0 Agent * Bundles 1 updates:
2011-04-18 13:42:39:056 1216 b0 Agent * {06F194CC-5843-4003-88DF-9AEA91660591}.501
2011-04-18 13:42:48:663 1216 b0 Handler Attempting to create remote handler process as MANDI-PC\Mandy in session 1
2011-04-18 13:42:48:760 1216 b0 DnldMgr Preparing update for install, updateId = {06F194CC-5843-4003-88DF-9AEA91660591}.501.
2011-04-18 13:42:48:765 2760 820 Misc =========== Logging initialized (build: 7.4.7600.226, tz: -0400) ===========
2011-04-18 13:42:48:765 2760 820 Misc = Process: C:\Windows\system32\wuauclt.exe
2011-04-18 13:42:48:765 2760 820 Misc = Module: C:\Windows\system32\wuaueng.dll
2011-04-18 13:42:48:762 2760 820 Handler :::::::::::::
2011-04-18 13:42:48:765 2760 820 Handler :: START :: Handler: CBS Install
2011-04-18 13:42:48:765 2760 820 Handler :::::::::
2011-04-18 13:42:48:770 2760 820 Handler Starting install of CBS update 06F194CC-5843-4003-88DF-9AEA91660591
2011-04-18 13:42:48:775 2760 820 Handler CBS package identity: Package_for_KB2503658~31bf3856ad364e35~x86~~6.0.1.1
2011-04-18 13:42:48:779 2760 820 Handler Installing self-contained with source=C:\Windows\SoftwareDistribution\Download\0409fb4cb385f81b5bd579b8c8b6fe76\windows6.0-kb2503658-x86.cab, workingdir=C:\Windows\SoftwareDistribution\Download\0409fb4cb385f81b5bd579b8c8b6fe76\inst
2011-04-18 13:42:58:308 2760 5b0 Handler FATAL: CBS called Error with 0x80070020,
2011-04-18 13:42:59:664 2760 820 Handler FATAL: Completed install of CBS update with type=0, requiresReboot=0, installerError=1, hr=0x80070020
2011-04-18 13:42:59:668 2760 820 Handler :::::::::
2011-04-18 13:42:59:668 2760 820 Handler :: END :: Handler: CBS Install
2011-04-18 13:42:59:668 2760 820 Handler :::::::::::::
2011-04-18 13:43:01:987 1216 b0 Agent *********
2011-04-18 13:43:01:987 1216 9e8 AU Triggering Offline detection (non-interactive)
2011-04-18 13:43:01:987 1216 b0 Agent ** END ** Agent: Installing updates [CallerId = wusa]
2011-04-18 13:43:01:988 1216 b0 Agent *************
2011-04-18 13:43:01:987 1216 9e8 AU #############
2011-04-18 13:43:01:988 1216 9e8 AU ## START ## AU: Search for updates
2011-04-18 13:43:01:988 1216 9e8 AU #########
2011-04-18 13:43:01:988 3568 ef8 COMAPI >>-- RESUMED -- COMAPI: Install [ClientId = wusa]
2011-04-18 13:43:01:988 3568 ef8 COMAPI - Install call complete (succeeded = 0, succeeded with errors = 0, failed = 1, unaccounted = 0)
2011-04-18 13:43:01:988 3568 ef8 COMAPI - Reboot required = No