OK, sorry for the incomplete post before. It is Windows XP Pro. I fixed some of the problems by following a MS Knowledge Base article that had me re-register about 6 .dll files relating to the Cryptographic Service. Now I am able to install programs and get the ActiveX to work. It still won't complete the updates but at least now I get to the the window where you choose "express install" or "custom install". It doesn't matter which one I choose it hangs for a minute and then goes to an error screen. It is also unable to verify any software I try to install, even MS stuff. SO I always get the "Are you sure you want to install this?" Whatever it is, is definitely off the beaten path because I have never had to register .dlls before so I am sure the rest of the fix is something equally obscure.
I did activate and register XP but I had to do it by phone because it couldn't find the activation server even though I was able to surf the internet.