take look at Windows or Temp-Directory and take a look at the log-file and search inside the logfile for FAILED and post the message. you could reinstall the .net framework 2.0 and than try to install the update.
Hey, what a bul*****, I like Serebys and so I dont use nLite 1.0 Final, because the support was broken. Do you use this pack? If not, why do you grumble?