SP1 is available for quite many now and I tried to install it but it failed with the error code 800704C8.
To isolate the I used MSCONFIG.
Disable all startup items and third party services when booting. This method will help to determine if this issue is caused by a loading program or service on computer startup. Perform the following steps:
1. Click the Start Button, type "msconfig" (without quotation marks) in the "Start Search" text box and then press ENTER.
2. Click the Services tab, check the "Hide all Microsoft services" box and click "Disable all" (if it is not gray).
3. Click the "Startup" tab and take note of the items that are checked and the items that are unchecked, as we will want to return your computer to this configuration when we finish troubleshooting. Once the checked items have been noted, click "Disable all".
4. Click OK to restart the computer.
If it still does not work there might be Microsoft services that you can try to disable.
In my case I found it was related to my previous post. When I disabled the Carbonite service I was able to install Vista SP1.
I reported the problem to Carbonite and got this reply:
Carbonite and other backup software use a Windows component called VSS (Virtual Shadow Service) to back up open or 'busy' files, but at times other applications on your system may be delaying Carbonite from accessing VSS, which in turn may delay the backup of your open files and cause an error with the Vista file copy feature. It uses the same VSS and the programs cannot use it at the same time. Disabling Carbonite while copying the file will allow you to use that feature.
What is interesting is that the problem I had described in that post where solved after SP1 was installed.
The Vista blog has more useful details.
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