Whilst attempting to run some updates on a users home computer running Windows XP many windows updates were failing to apply and reporting the Failed Updates Error. Even Service Pack 3 was failing to respond.

Drilling down into why the updates were failing I found the following error message being reported “Installation Failure, Error Code: 0×8007F004 Try to install the update again, or request help from one of the following resources.“

This seems to be an insufficient privileges warning often found by changes in the local security policy, however as this was a home computer no policy updates had been made. Interestingly many of the failed updates were security related updates so off I headed into the local policy editor.

After talking to the user I discovered they had tried recovering their user account but could not remember the steps they had actually taken. The current user account, even though it was created as an Administrator, seemingly had insufficient privileges to install various security related system updates on their system. I checked this by heading into Local Security Settings: Start->Control Pane->Local Security Policy->Security Settings->Local Policies->User Rights Assignment.

Once this was confirmed I located a Microsoft Support Note: Error message when you try to install a hotfix or an update on a Windows XP computer: "You do not have permission to update Windows XP", and although I followed the instructions the problem remained. Having a leaning towards using the command line I thought of the ntrights utility I had used before which seemed to fix the problem.

To fix this problem I used the program ntrights from the Resource Kit Tools (available from Windows 2003 Resource Kit) to update the security privileges on various local security policies including the Take ownership of files, Restore files and Directories, Backup files and directories, Create global objects, and Manage auditing and security log. The problem is now fixed though I cannot be sure which of the policies in particular might have fixed this problem (I cherry picked small groups of them until the update started working again).or other objects

UPDATE: I have since found a handy script, which automates many of these changes, located at PC Review.