I keep forgetting this: If an .NET 3.5 SP 1 install fails, and I yet again fail to consult the logs, as I ALWAYS DO, it is because of that nefarious MSXML 6.0 Parser, may it burn in a very hot place!
MSXML 6.0 Parser, if already installed, must be uninstalled before a .NET 3.5 SP1 update can be performed. Otherwise it will block the entire install, and those thrice damned error messages will keep popping up.
Amazing that I have to rediscover this fact time and time again.
Early Alzheimer? Sure don't hope so!