I just fixed this problem for my PC that is NOT a workaround. I just posted a step by step instruction on how I got this endless update loop to stop for good. I hope this works for you as well.
Here is a link to my post: http://answers.microsoft.com/en-us/windows/forum/windows\_xp-windows\_update/fixed-no-more-updates-trying-to-install-over-and/1a7d813f-94d2-42e7-a2c8-ad44ab1630f1
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