Since I'm having this problem as well, it's nice to know I haven't completely lost my mind.

According to MacFixIt, a number of users are apparently unable to install the Boot Camp 2.1 update which Apple released last week. While the update needs to be launched in the Windows partition, users are experiencing problems when attempting to install the update via Windows Software Update or through the standalone installers.

One error report reads as follows:

"The installer encountered errors before boot camp could be configured"
"Error applying transforms. Verify that the specified transform paths are valid."
Some users are experiencing an issue wherein the Boot Camp 2.1 updater .exe file downloaded from Apple's Web site briefly launches then does nothing.

Upon attempting the update, one user reported the following:

"The update does appear in the updater Apple Software Update, is downloaded, but then gives an error message advising to download only and not install immediately. I then tried the stand alone installer from the web. This one reports "preparing installation", then disappears en nothing happens. My guess is a file extraction problem (disabled firewall protection, by the way)."

In my case, Windows tries to launch the file and does nothing.

Yep a mighty operating system, that Windows XP with every update under the sun.

If you've seen this on your end or discovered a workaround or solution, please let us know in the comments or forums.