Do you have Norton System Works installed or more specifically System
Doctor?

Check your windows\inf folder (a hidden system folder and you will have to
enable the viewing of such files and folders in Explorer (Tools | Folder
Options | View and check "Show hidden files and folders" and uncheck "Hide
protected operating system files") and look for large numbers of oem*.inf
files that are all 0 bytes in size.  If you've got thousands of such files
this is the cause of your problem.  Delete ONLY the 0 byte oem*.inf files.

Why has this happened? One possibility it that you have Norton's System
Doctor installed and forgot to disable System Doctor before updating your
system from the Windows Update site.  If you don't delete these files some
software and most hardware and driver installs will take a very long time
to complete if they complete at all.

For more details see the Symantec site:
http://service1.symantec.com/SUPPORT/nunt.nsf/docid/2000120915010309&src=n
and also MS KB 281967 - "Computer Stops Responding (Hangs) During Setup,
Installing Updates, or Adding New Hardware"
(http://support.microsoft.com/?kbid=281967).  I would strongly recommend
that you contact Microsoft and mention KB281967 and also KB301540 and ask
for a copy of the new ifsmgr.vxd v4.90.3003.  You will then either be sent
the file or told how and where to download a copy.  There should be no
charge for this call other than for the cost of the phone call.

Alternatively do yourself and your PC a big favour and dump System Doctor.

Make sure you can see all files and folders:

Go to My Computer - Tools - Folder Options - View:
- Select "Show hidden files and folders", click Apply - OK

Now go to C:\Windows\inf and locate the files called oemXX.inf of 0kb
(zero), where XX are numbers.

If you see them, they could literally be thousands, and you must delete them
all (the 0kb ONLY!).

After doing that, reboot and retry the install.

Zee