fyi- with caution that what solved the problem on my machine may harm
yours--so be careful and backup before trying any fixes:
I had the same problem, was initially told to hide the update since I had no
os problem to solve, but I asked for clarification since the update site
always said I needed the update, but it would not install..
I was able to escalate my Microsoft Online Support request and the problem
was eventually resolved.
fyi here is the simple solution that worked and permitted the update to
download and install. It consisted of removing a file named wdf01000 from the
WindowsXP System 32 Drivers folder in order to check if it was corrupted and
blocking the installation, storing it in a temporary folder, and then having
the update site do a custom search for updates for my computer. This driver
was replaced as part of the { Windows XP Microsoft - Other hardware - HID
Non-User Input Data Filter (KB 911895) } update which then successfully
installed.
Again, this problem apparently can have various causes, so what solved my
problem may worsen yours and those who try this should be cautious.