I just had the pleasure of fixing a computer with an update problem, it would not install KB936181 no matter what was done..
I found this guide on some page;
How to fix the KB936181 Windows Update problem: Click Start -> Run, type cmd and click OK
Type ren %windir%\System32\msxml4.dll msxml4.old, and press Enter (Ignore any errors stating that the file could not be found)! Next, type exit, and press Enter
Now, simply visit the official Microsoft KB93618 download link and manually download and install the update
Restart your computer and if all goes well, your KB936181 update issues should be history.
This sounded quite sane, so I decided to try it… However after renaming the file I tried to run the update and got the three options 1) Modify 2) Repair 3) Remove, and I decided to go for the remove option, after this I reran the advertisement from the update server (SCCM WSUS) and viola it installed without a glitch.
As the user said, what a stupid update 😀 I could not agree more..