Since I had to test some webpages with IE6 (please don’t ask), I wanted to use Windows XP Mode on my Windows 7 laptop (actually run it in VMWare as described here). Microsoft provides virtual machines (vhd files) to run in Microsoft Virtual PC.Windows Virtual PC for Windows 7 is released as an update for Windows 7, and has the Knowledge Base Article ID of KB958559. So I tried to install it. That went actually pretty well until I had to reboot my laptop. At about 98% of the update process during the reboot it gave an error and rolled back the update. The log showed:
Installation failure: Windows failed to install the following update with error 0x80004005: Update for Windows KB958559
Digging into the support forums and blog posts on the subject, the most common working solution I found to the problem was to uninstall VMWare and/or VirtualBox. After the uninstall you can install Virtual PC without the error and after that reinstall VMWare and/or VirtualBox.