Microsoft recently started forcing people to install and use Windows Genuine Advantage in order to update via the Windows Update web page. To get around this, all you have to do is this:
1) Load up Internet Exploder
2) Go to Tools -> Manage Add-ons...
3) Set the dropdown 'Show:' menu to "Add-ons that have been used by Internet Explorer'
4) Highlight 'Windows Genuine Advantage' down below by clicking on it then set it to 'Disable'
5) Click on OK and you're all set.
Please note, the above process is outlined for Windows XP SP2. If you do not have SP2 installed, you won't be able to find the Manage Add-ons... menu.