This may help explain the difference between Office Update and Microsoft
Update.
From Microsoft Update and other services: Frequently asked questions:
http://www.microsoft.com/athome/security/protect/update.mspx
Q. What's the difference between Microsoft Update, Windows Update,
Automatic Updates, and Office Update?
A. All of these are Microsoft services designed to improve the
security and reliability of your computer. Each is used to keep different
versions of Microsoft Windows and Microsoft Office up to date.
Microsoft Update is a Web site that helps you keep both Windows and
Office current.
. It supports Microsoft Windows XP, Windows 2000 SP3 or later,
and Windows Server 2003.
. It provides updates for Microsoft Office XP, Microsoft Office
2003, Microsoft SQL Server, and Microsoft Exchange Server.
. It will be used to keep other Microsoft programs up to date in
the coming months.
Windows Update is a Web site that helps you keep Microsoft Windows
2000 SP2 or earlier, Windows Me, Windows 98, Windows 95, and Windows NT
Workstation 4.0 current. (It also supports the versions of Windows that
Microsoft Update does.)
Automatic Updates is a tool that automatically delivers the latest
high-priority updates to your computer for both Microsoft Update and Windows
Update.
Office Update is a Web site that helps you keep all the programs in
the Microsoft Office suite up to date. If you use Office 2003 or Office XP,
you get these updates as part of the Microsoft Update service.
How to troubleshoot Windows Update, Microsoft Update, and Windows Server
Update Services installation issues:
http://support.microsoft.com/default.aspx?scid=kb;en-us;906602
Regarding the updates, see if this helps:
http://support.microsoft.com/default.aspx?scid=kb;en-us;304498
If none of those helps, credit goes to Peter Foldes for this fix, which
several people say has resolved the issue:
1st Rename Office subkeys
Note: Removing the following registry keys may reset customized user
settings for your Microsoft Office programs.
1. Close all the applications.
2. Click on Start->Run, type in REGEDIT and click on OK.
3. Locate and select the following registry subkeys:
HKEY_CURRENT_USER\Software\Microsoft\Office\11.0
HKEY_LOCAL_MACHINE\Software\Microsoft\Office\11.0
4. Right click on 11.0 and rename them to Old11.
5. Close the Registry Editor.
2nd. Detect and Repair Office 2003
1. On the Windows taskbar, click Start, point to and click Control Panel.
2. Double-click Add/Remove Programs.
3. Click Change/Remove Programs on the left pane.
4. Highlight Microsoft Office Professional Edition 2003 on the right pane
and click Change.
5. Insert the correct version of CD when it requires.
6. Select "Reinstall and Repair" and click Next.
7. Select "Detect and Repair errors in my Office installation".
8. Click Install and wait the process to end.
3rd. Install the Updates