My windows update fails to install new updates on my XP dell laptop. I have SP2 and IE6 on inspiron 4150. I also noticed for about 6 months or so that opening internet explorer actually shows up as explorer.exe in a porcess listing using sysinternals, or task manager. Opening additional IE windows only adds memory to explorer process. I guess I am running IE that is embedded in windows explorer? I don't remember what I did to get to this but the bottom line is that ever since then windows updates is not functional.

I cannot reinstall SP2 nor IE6. I tinkered with services making sure nothing is disabled, and also making sure that update service is automatic, along with other XP services required.
I do run hijackthis regularly and didn't notice anything unusual, didn't find any ADS, also run systinternals tcpviewer often while working and nothing unusual. No rootkits have been found(using the sysinternals stuff). Cain&Abel's sniffer is also running from time to time to see if something unusuall is happening. But nothing in the form of rootkits or logon attempts is seen. At least nothing on the network level.

Any ideas what I could have done to create this. I like the fact that everything runs from explorer process but I'd like to update the laptop as well.