Curious, what hardware are you running Vista on? USB 2 became standard during the Pentium 4 / Athlon XP days. Everything since then has at least USB 2. I'm trying to recall if there were any motherboards with DDR ram that had usb1, are you running a system with PC133 ram?
Standard procedure for me is stopping the Windows Update service and deleting all files in the data and download folders under softwaredistribution, then re-start Windows Update. It'll recreate the deleted files. Often fixes up problems with updates.
But, download the full SP1 install from Microsoft (instead of using Windows Update) and run it:
http://support.microsoft.com/kb/935791
Then download and run SP2.