Windows Update Already Installed - article from Marc Liron
I've often heard people complain that Windows Update tries to give them updates that they already have. Here is a very good troubleshooting article from Marc Liron, Microsoft MVP and author of WindowsXP Newsletter.
Website - Tip
Quote from the website -
If you visit the Windows Update site for Windows XP, you may find that the list of updates includes items that you have already installed on your computer.
This issue may occur if the updates that you have installed on your computer have not been registered correctly.