I would suggest perform the following troubleshooting steps:
1. Run this KB (it will act like it is installing an update but it is actually running a check on the system) http://support.microsoft.com/kb/947821
Then after it runs, reboot and run Windows update. But when you run Windows Update make sure that only Vista SP1 is attempting to install and not any other updates.
2. Prepare clean boot and try again.
Clean Boot prevents software conflicts by preventing the startup items and non Microsoft services from loading. This way you can safely follow the process
of elimination to check which application is causing this behavior.
How to troubleshoot a problem by performing a clean boot in Windows Vista or in Windows 7
Note: Ensure that you put your computer back to normal startup mode after completing the troubleshooting steps. Steps are available in the article given
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