Just one idea (may not work ). Boot into safe mode and then try going to add/remove programs.
Control Panel > Add/Remove Programs
If not ticked at the top of the window, tick show updates. The update you installed will have to be uninstalled. Scroll down until you find
Windows XP - Software updates
If you haven't recieved any more updates since this bad one, click on the newest Windows XP Hotfix. (The install dates are to the right of each one). Reboot into normal XP (no safe mode). The problem may be fixed.
Hope I could help.