Microsoft folks have given me steps to take care of this that don't work including
# Delete the contents of the DataStore folder: which now means microsoft updates does not remember any of my past updates except the current failures over and over.
Here is what it says I now need to install according to Windows Update:
Windows Genuine Advantage Validation Tool (KB892130)
Update for Windows XP (KB898461)
but I keep getting Error Code: 0x80246008