Same update appears & installs every time I turn off pc.

Try installing it from the offline installer...
http://www.microsoft.com/en-us/downl....aspx?id=14623
(...and yes, despite what it says on the page, it is the correct version, according to Microsoft Security Bulletin MS08-069 - Critical : Vulnerabilities in Microsoft XML Core Services Could Allow Remote Code Execution (955218) )

Hmm - so do I !?!!
Tracking the update through the system - it's actually been replaced by a later one.
is KB2721691 installed?

If so - simply hide the KB954430 update, and it shouldn't bother you again :)

It's not installed on either of my x64 machines either - and the KB2721691 update gives the same error on my test rig.
This makes me suspect that it's a false-positive, and is actually not required at all - by default, MSXML4 isn't installed in Win7, so far as I know (it uses MSXML5)

Having said that - Security updates for Microsoft XML Core Services 4.0 Service Pack 2 may repeatedly appear in the update list on Microsoft Update or on Windows Update may apply, although you'll need to modify the procedure slightly for Win7

Open an Elevated Command prompt, and run the following commands (seperately - you may need to confirm them)

REN C:\Windows\system32\msxml4.exe msxml4.old

REN C:\Windows\SysWOW64\msxml4.exe msxml4.old

Close the window and try the install again -

To open an Elevated Command Prompt Window (the ECP window), click on Start, All Programs, Accessories – then right-click on Command Prompt, and select Run as Administrator. Accept the UAC prompt.

Doesn't surprise me too much - I think its' a false-positive.
just hide the update :)