This is an old one, but I’ve only just managed to find a solution after searching on and off for several months; we’ve had a couple of machines that developed the problem but it was never really considered serious enough to put a lot of effort into solving.
Scenario: You have a machine with some element of SQL 2005 installed; be it simply the management tools or the full-on server with all the trimmings. This machine claims, via WSUS or Windows Update, that it needs Visual Studio 2005 SP1, but the install keeps failing. If you run the update manually, it keeps asking you for “Microsoft Visual Studio 2005 Premier Partner Edition ENU – Disk 1”. Browsing provides you with a filename “vs_setup.msi” but the only one you can find on your machine is part of the .NET Framework 3.5 and isn’t the one it’s looking for.
Solution: Point the installer to the “vs_setup.msi” file located in the “Tools” folder of your SQL 2005 install media.