when the nvidia update tool prompts me with an updated driver I always make sure I follow this process for un-installing the driver in my PC and installing the new updated drivers, as such I cant remember the last time I had an issue, I'd suggest another clean and fresh install might be in order.
first download the new driver to desktop or some other location where you can remember/find it later, do not install the driver.
1. uninstall 3d drivers and physx via control panel/uninstall program
2. delete certain Nvidia folders in windows explorer (which folders will depend on your OS version)
3. device manager - uninstall GTX 460 drivers
4. reboot in safemode and run driversweep to remove traces of nvidia drivers left over
5. optional - i run cccleaner at this stage to remove crap from recycle bin
6. reboot in normal mode and install new driver
see this link for more info as their might be specific things for WinXp 64 users to perform...
I like WinXP but havnt used it for quite some time so not sure which version Nvidia was offering you as update, can you confirm the version number it is prompting you with? I have Win7 x64 and am using 285.62
Was it offering you 285.58 as the update for XP?