When Microsoft unveiled the new Windows Update Web site for all Windows XP computers in August 2004, I discovered that none of the XP Service Pack 1 (SP1) or SP2 computers in our domain worked with the new site. When I clicked the Install Now button, Windows Update downloaded the software. However, when Windows Update tried to register the software, it displayed error 0x80070005, which stated Windows Update has encountered an error and cannot display the requested page.

I restarted the browser and returned to the Windows Update Web site, but Windows Update immediately displayed error 0x8DDD0007, which stated Windows Update cannot be displayed because your computer requires you to restart it in order to finish another process. When I rebooted the computer and went back to the Web site, Windows Update started all over again with the Install Now button and repeated the same errors as before.

After investigating the situation, I discovered why Windows Update wouldn't work. Our company uses Microsoft Software Update Services (SUS) and has a Group Policy Object (GPO) that configures automatic updates on our XP and Windows 2000 computers. That GPO sets the Automatic Updates service's Startup type setting to Automatic. You can find the Startup type setting at \Computer Configuration\
Windows Settings\Security Settings\System Services\Automatic Updates. When Startup type is set to Automatic, the GPO automatically sets the security for the service to

Administrators: Full Control
INTERACTIVE: Read
SYSTEM: Full Control

These settings don't match Windows' default security settings for that service, which essentially are

Administrators: Full Control
Authenticated Users: Read
Power Users: Full Control
SYSTEM: Full Control

To solve the problem, I edited the GPO. I deleted the INTERACTIVE: Read setting and added the Authenticated Users: Read setting. (I left the Power Users: Full Control setting off the security list.) Now that our XP computers have applied this policy update, we can use the Windows Update Web site without any problems.