There is a known issue with the current Windows Update client. If the update service includes a notification for a driver and the system already has that driver installed, or a superiror driver, the update will continuously fail. Microsoft plan to release a new Windows Update client in May 2005. This issue effects the update for the VIA Rhine 2 Faster Ethernet Controller v3.43(dated 2005/01/28). Problem: Microsoft automatic update tells you about the update - click to download - downloads with no problem - click install - fails to install. Hence forth you are continuously asked to update the driver but it never works! The fix: Go to the Windows update website and scan for optional updates. The VIA Rhine 2 Faster Ethernet Controller should be listed as an option. Download it and install via the Windows update website instead of via the automatic update notification and it will work.
Automatic Windows Update silently does not update if you have a non-transparent web proxy between you and the Windows Update site. This is because AWU does not take account of any proxy settings which may be required, so it fails to connect to the update server. It doesn't log the failed attempt.
Running 'Windows Update' manually works because it runs within IE, and hence uses IE's proxy settings.
The only workaround I am aware of is to install Software Update Services on a machine which can be accessed without going through a proxy (e.g a server on the local network). SUS allows configuration of proxy settings for its own use.
Also check this forum
http://reviews.cnet.com/5208-6142-0.html?forumID=5&threadID=63921&messageID=1104707