problem installing sp2, can't install IM software

Archived from groups: microsoft.public.windowsxp.configuration_manage (More info?)

this is a new one on me.

A dell desktop with windows xp pro (upgraded from windows 98) in a corporate
setting, with windows 2000 domain controller.
the current user is the 3rd user to have this box, she has local and domain
admin privileges.

When she signs on using the previous user's login information, everything
works the way it should.

However, when she signs on using her own credentials, she is unable to
download and install yahoo IM client (used as interoffice app), as a matter
of fact, when she goes to the yahoo IM website, IE doesn't display the gif's
on the page. I reviewed the security settings, all seems to be in order.

When she told me about being unable to install SP2, I first suspected an
invalid license. However, that is not the case, all licenses are valid.
Instead, SP2 says the install failed because it can't find a registry key.

I'm stumped...Has anyone seen this before? Any suggestions?

thanks,
Ron