If you have a messed up install of WSUS You will need the following.
http://social.technet.microsoft.com/Forums/en-US/sharepointadmin/thread/221bd010-ae12-429b-8c10-3f9d0c1ceb6c
http://support.microsoft.com/kb/925976
http://technet.microsoft.com/en-us/library/cc708610(WS.10).aspx
For me i had to Uninstall WSUS but tell it to leave the DB. Reboot. Then find the Reg Keys as explained in one of the links. I had to delete these rather than change. After this uninstalled Windows Internal DB from Add/ Remove. The reboot. The manually delete the stuff in c:\windows\sysmsi\SQL Server 2005. Then check the
Then i was able to re-install from Package.