Automatic XP Update - Will Not Install

I've got a laptop with Windows XP Professional installed, and have had it for about two years now. This is my first computer with XP and I've noted how the system will automatically install periodic XP updates.

Now I've got an Windows XP icon in the Icon Tray and when you click on it says that it is a Security Update for the Microsoft XML Core Services 4.0 SP2. However, when you click on the option to have the system install the update, it initiates the update and seems to complete the installation - but the update icon still shows up in the Icon Tray.

I've also noticed that on the three Turn Off Computer options that a Automatic Update shield symbol appears superimposed on the Turn Off option, with instruction below that say to have the computer turn itself off and the update will be installed. Well, I've tried that option also, and as the system tries to shutdown, I see it trying to install the update, but apparently unsuccessfully.

Maybe unrelated, but I've also noted that occasionally, when I use the Turn Off Computer option, it will only show the Switch User or Log Off User options - and none of the others (Standby, Turn Off, Restart).

Any help or suggestions on what to do to kick start that automatic update to take hold?