This is the error in the DXError.log file:

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[03/22/08 23:28:53] module: dxupdate(Mar 5 2008), file: dxupdate.cpp, line: 2223, function: RegisterDLL

Failed API: LoadLibraryEx()
Error: (0xc000001d)

Unable to load C:\WINXP\system32\xactengine3_0.dll.

--------------------
[03/22/08 23:28:53] module: dxupdate(Mar 5 2008), file: dxupdate.cpp, line: 5848, function: DirectXUpdateInstallPlugIn

RegisterDllFromSection() failed.

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[03/22/08 23:28:53] module: dsetup32(Mar 5 2008), file: dxupdate.cpp, line: 280, function: CSetup::InstallPlugIn

DirectXUpdateInstallPlugIn() failed.

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[03/22/08 23:28:54] module: dsetup32(Mar 5 2008), file: setup.cpp, line: 1701, function: CSetup::SetupForDirectX

InstallPlugIn() failed.

--------------------
[03/22/08 23:42:06] module: dxupdate(Mar 5 2008), file: dxupdate.cpp, line: 2223, function: RegisterDLL

Failed API: LoadLibraryEx()
Error: (0xc000001d)

Unable to load C:\WINXP\system32\xactengine3_0.dll.

--------------------
[03/22/08 23:42:07] module: dxupdate(Mar 5 2008), file: dxupdate.cpp, line: 5848, function: DirectXUpdateInstallPlugIn

RegisterDllFromSection() failed.

--------------------
[03/22/08 23:42:07] module: dsetup32(Mar 5 2008), file: dxupdate.cpp, line: 280, function: CSetup::InstallPlugIn

DirectXUpdateInstallPlugIn() failed.

--------------------
[03/22/08 23:42:07] module: dsetup32(Mar 5 2008), file: setup.cpp, line: 1701, function: CSetup::SetupForDirectX

InstallPlugIn() failed.