Hey. Yes, things like this is strange and annoying. I suggest trying the easiest solution. You can install SP1 directly from Microsoft through a setup program, bypassing Windows update. The link below is the official, free download site for SP1 from Microsoft. Just run setup and see if it works.http://www.microsoft.com/en-us/download/details.aspx?id=5842
I suggest keeping the file backed up for future use. Next tine you clean install Windows 7, you can run this setup file to quickly install SP1.