You cannot 'slipstream' a Vista installation CD (yet), so the only option is to first install Vista and then install SP1 - preferably manually, if you have the file.
With those problems on a machine, I'd re-install the OS from scratch. You could also try a manual installation of SP1 first; maybe it'll work (but probably not). Try emptying C:\Windows\SoftwareDistribution\Download before you run Windows Update.
With those problems on a machine, I'd re-install the OS from scratch. You could also try a manual installation of SP1 first; maybe it'll work (but probably not). Try emptying C:\Windows\SoftwareDistribution\Download before you run Windows Update.