This article uses a specific MS SQL 2005 Service Pack 4 installation error as an example, but may help in troubleshooting other Microsoft and Windows Update problems.

Installation of SQL server 2005 Service Pack 4 fails and Event ID 20 Error is recorded in Windows System Logs:

Type: Error
Event ID: 20
Description:
Installation Failure: Windows failed to install the following update with error 0x80070643: Microsoft SQL Server 2005 Service Pack 4 (KB2463332).
For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.

This error is not specific to SQL 2005 SP4 and is just a generic code telling that an error was encountered by Windows Installer.
To get more specific code download offline Service Pack or Hotfix installation file from Microsoft. Just search MS download centre for KBxxxxxxx as displayed in Event ID 20 error. In case of SQL 2005 SP4 it is KB2463332.

Try installing your update running downloaded .exe or .msi. It will probably fail again, but this time you should be able to find more specific info in Windows Application Logs.
In case of SQL 2005 SP4 it can be something like this:

Type: Error
Event ID: 1023
Description:
Product: Microsoft SQL Server 2005 – Update ‘Service Pack 4 for SQL Server Database Services 2005 ENU (KB2463332)’ could not be installed. Error code 1603. Additional information is available in the log file C:\Program Files\Microsoft SQL Server\90\Setup Bootstrap\LOG\Hotfix\SQL9_Hotfix_KB2463332_sqlrun_sql.msp.log.

Again, this is quite generic error, however this times it gives a path to a setup log file which will have much more information. Open the file in a text editor. Don’t get puzzled by the amount of information. Just search for “return value 3” and examine text just above this string. One of the lines should have a specific error which caused setup to fail. Going back to our SQL example third line above “return value 3” is:
FTECa.DLL: ERROR: FTE: InstallFTERef: Fail to create FTERef file: C:\SQL\MSSQL.1\MSSQL\FTData\noiseCHS.txt, Err=3
In this case installation failed because path C:\SQL\MSSQL.1\MSSQL\FTData did not exist. Simply recreating missing folder fixes the problem. Obviously in your case error may be different.

Windows Server 2003
SQL 2005