KB974431 Fails (Not the invalid key problem tho!)

My brand-new, retail copy of Windows 7 x64 Ultimate will not apply update KB974431. Unlike all of the articles I can find here or elsewhere by searching, I do not get 90% done and fail, and I have a very valid, properly activated copy of Windows 7. Here are the corresponding Event Viewer items:

Standalone Installer Setup Entries:
Windows update "Update for Windows (KB974431)" could not be installed because of error 2147942413 "The data is invalid." (Command line: ""C:\Windows\system32\wusa.exe" "C:\Users\Erik\Desktop\Windows6.1-KB974431-x64.msu" ")

Windows update "Update for Windows (KB974431)" could not be installed because of error 2147942487 "The parameter is incorrect." (Command line: ""C:\Windows\system32\wusa.exe" "C:\Users\Erik\Desktop\Windows6.1-KB974431-x64.msu" /log ")

Windows Update Entries:

Installation Failure: Windows failed to install the following update with error 0x80070057: Update for Windows 7 for x64-based Systems (KB974431)

Any ideas? I already renamed the SoftwareDistribution folder, and have tried it with and without antivirus installed. I am in IT, so even complicated solutions are welcome. Thanks!

Update

Well, I tried extracting the standalone update and the associated cab file, and even ran a manual install on the XML file using pkgmgr. Here are the only error entries in the extended log created using that method:

2009-10-23 09:32:08, Error DISM DISM Package Manager: PID=4824 Failed to get the underlying CBS Feature - CDISMPackage::OpenFeature(hr:0x800f080c)

2009-10-23 09:32:08, Error DISM DISM Package Manager: PID=4824 Feature name Windows6.1-KB974431-x64.xml is unknown. - CPackageManagerCLIHandler:rivate_GetFeaturesFromCommandLine(hr:0x800f080c)

2009-10-23 09:32:08, Error DISM DISM Package Manager: PID=4824 Unknown features were specified on the command-line. - CPackageManagerCLIHandler:rivate_GetFeaturesFromCommandLine(hr:0x800f080c)

2009-10-23 09:32:08, Error DISM DISM Package Manager: PID=4824 Failed to get the Feature List from the command line. - CPackageManagerCLIHandler:rivate_ProcessFeatureChange(hr:0x800f080c)

2009-10-23 09:32:08, Error DISM DISM Package Manager: PID=4824 Failed while processing command enable-feature. - CPackageManagerCLIHandler::ExecuteCmdLine(hr:0x800f080c)

Anyone have any ideas? I believe I read that this update encompasses several other updates, does anyone know what the individual updates are? Perhaps I can install them individually? This is driving me crazy, everything I have read indicates that this is a fairly important update.

Have you activated the key yet?

Yes, the system properties applet shows "Windows is Activated." I activated it shortly after it first booted, although not until after my first set of automatic updates were installed. I don't think that would make a difference, but I am trying to think of any detail at this point.

May be your version does not require the update. Period.

The update are for 7600.16385-1255 090713, to ..16404..090722 and maybe yours is the 090722 version.

I got the same problem with my laptop, running win7 build 7600 x86 but
was activated by replacement pkeyconfig.xrm-ms ( C:\Windows
\System32\spp\tokens\pkeyconfig ) and tokens.dat ( C:\Windows
\ServiceProfiles\NetworkService\AppData\ Roaming\Microsoft
\SoftwareProtectionPlatform\ ) by files in build 7100 or build 7064 RC
version.
The update failed after restart windows.

After work arround, i found the way to fix, hope it will be helpful
for you if you're using crack-activation version of win 7:
- You should re-copy the original files of win7 build 7600 to the
folders above.
- Run update again, it will be successful.
- Re-activate windows by an RC key.