CoolWebSearch browser hijacker - Part II (Windows Update not working)

Referring to last month's thread beginning at
http://archive.midrange.com/pctech/200410/msg00122.html:

CoolWebSearch is stealthier than I thought.  I've run CWShredder, SpyBot
S&D, AdAware.  Several times.  It still manages to come back, although I
have not witnessed the IE browser being hijacked.

This may or may not be related to CWS, but I am unable to get Windows Update
to work.  I was able to get SP2 installed on this XP Home box (after first
running all of the above "cleaners"), but Windows Update is still not
working.  I followed instructions at M$ KB that caused a new version of
Windows Update to be downloaded; it cranks for awhile, and I get "100%
downloaded".  It cranks a little more, and I get "100% registered".  And
then it just sits there.  I left it on overnight on the hope that it might
do something, but no go.  Instead I get welcomed with a "low resources"
warning.

I'm ready to give up on this and tell the owner that he may just need to do
a scratch install.

Advice / suggestions welcomed and appreciated.
db