Hi;

First, look in your Add/Remove Program list for "Update Rollup 1 for Windows
2000 SP4" instead of the KB number.  That is how this one is listed.   Do
you see it there?

Also check this key in the Registry:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows
NT\CurrentVersion\HotFix\Update Rollup 1

You should see (in the right pane) an entry named "Installed" and it should
have a value of "1" if the update installed correctly.  I suspect that entry
either is not there or has a value other than "1" on your system.

This could be caused by a number of things.  A 3rd party program that (at
the last minute) interferes with the final steps in the install process.
For example, some versions of Norton will attempt to protect against
Registry writes; as do some of the 3rd party so-called "Uninstall Helper"
programs.   Or it could be a sign of malware on the system.

Anyway, perhaps the easiest solution for you will be to manually download
the update, boot into Safe Mode, and with your AV and any other 3rd party
"helper" apps disabled.  Attempt to install it from the local .EXE file
while in Safe Mode.

Note that you must be logged in as the Administrator when doing this.  You
will find the direct download link about halfway down on this site:
http://support.microsoft.com/kb/891861   You may want to keep that URL
handy, as there are some additional troubleshooting tips there if needed.

NOTE:  If you did indeed see the "Update Rollup" entry in Add/Remove
Programs, use that to UNinstall the update as your first action after
booting into Safe Mode.  Then proceed with the manual install.

HTH