I would recommend going down the route of re-installing/re-setting WindowsUpdate. The methodology for doing this has been well documented now, but was a lot easier in Windows XP. With that being said, it is important to mention that your system may run absolutely fine, but if there has been any corruption in Windows Side-By-Side or other components, Windows 7 SP1 will roll-back. This includes any problems discovered whatsoever when running System File Integrity Check (SFC /SCANNOW). If any files are found to be faulty in this arena using the command-line, you will not be able to install SP1, even if your system appears to be functioning normally. This is because the checksums don't match on files you may not even using - but would be part of a restore process if you lost drivers or encountered a DLL problem. This check is performed during the install process, but does not appear to be revealed to the end-user, and will prompt a roll-back over and over. To find out if this is the source of this problem, you should run sfc /scannow. Otherwise, it could be a corruption issue with Windows Update, under which case you should try repairing that datastore as well. Any kind of minor issue with operating system integrity, however nil, seems to prevent the install of the Service Pack.