Thanks for your response.
I recently built both this computer and my wife's myself. Thus, the only antivirus we have had installed is Microsoft Security Essentials.
I ran the Microsoft Fix It 50202 in both the default and agressive modes and attempted to install SP1 again. Same error. I am 90% sure this is related to the hack to allow the use of Windows Mail, as detailed in this thread:
Windows Mail
There are no fixes listed on that thread, however, other than formatting and reinstalling Windows. Surely there's another way...