When you press Install Now to install the subject update, you receive:
No Updates Were Installed
If you view the %Temp%\Ohotfix<Number>.log file, it contains:
Finished processing the update on Date at Time.
Encountered error 1603 while updating.
Error 1603 not ok to report to Setup Watson.</b>
This problem will occur if a file in your installation of Windows SharePoint Services is missing or corrupted, or the source files, located by default at %ProgramFiles%\STS2Setup_1033, is missing or configured to use a different name.
To resolve this problem:
1. Run Stsv2.exe that you used to install the original release of Windows SharePoint Services, or download it from http://download.microsoft.com/download/9/f/9/9f93d3bc-097c-48bc-88d6-7f612582f131/STSV2.EXE.
2. Select Reinstall or Repair on the Maintenance Mode Options page.
3. Press Next.
4. Select Reinstall Microsoft Windows SharePoint Services 2.0 on the Reinstall or Repair Microsoft Windows SharePoint Services 2.0 page.
5. Press Install.
After you have successfully installed Windows SharePoint Services, visit Windows Update to install Windows SharePoint Services SP1.