Thank you all for the response.....
No offense to jephree but, I went with OWENs response & everything appears to be working fine with one exception.
After restarting & installing the updates I noted that update KB928366 (.net Framwork Ver1.1 sp1) did not install and was flagged as FAILED, this reproduced the problem. I just repeated the suggestion made by OWEN, this time doing a custom install without KB928366. ALL APPEARS TO BE OKAY.
Thanks to jephree & owen
As for the failed install.... that another problem which I will attempt to solve later.