If you have say a retail copy of 32-bit Windows 7 Pro SP1 installed, then you should be able to use a slipstreamed 32-bit Windows Pro SP1 DVD if you created it from a retail 32-bit Windows 7 installation DVD or ISO to do a repair install
You will not be able to use say a retail version on a OEM factory installation though.
Windows Update may have made your current installation newer than what you had on the other slipstreamed Vista/XP discs, and could be why it failed with that error.
I'm going to create a slipstreamed copy for my current installation now, then test doing a repair install to see how it goes. I'll post back later with the results.