Shinil Hong of SUNY Buffalo has sent us his analysis of problems encountered with the installation of MS05-054. Here's what Shinil found out:  The cumulative Internet Explorer patch fails to install when ProgramFilesDir value in HKEY_LOCAL_MACHINE\Software\Microsoft\Windows\CurrentVersion registry key points to a manually changed drive letter that is different from the default %SystemDrive%\Program Files path (e.g. C:\Program Files). The U.S. distribution versions of Microsoft Windows Server 2003 and XP ship with MS Internet Explorer 6.0 installed by default in %SystemDrive%\Program Files\Internet Explorer\ directory. If the ProgramFilesDir registry value points to D:\Program Files, for example, while the actual program directory of MS Internet Explorer is C:\Program Files\Internet Explorer, the patch installer will attempt to update the empty D:\Program Files\Internet Explorer directory and fail eventually.  For a solution, change the registry key back to the default while applying the update. 
[Note: This problem description and resolution has not yet been verified by SANS ISC]