I was having extensive problems updating this update as well. I must
have spent at least a full day now trying to figure it out, throwing
everything at it I could find. Then I found this:
http://www.eggheadcafe.com/software/.../kb938979.aspx
I too had moved not only my user folders to a second hard drive, but
also my Public folder via registry edit. After following the steps
listed on that link, I was able to get the KB938979 patch installed.
It reports as successful and shows in the installed updates list, but
it doesn't look like the file versions were updated.
So I'm halfway there. Just thought this might help others who are
having this same trouble.