I integrated KB953631, but Windows Update still showed it as an update. I installed it and rebooted. It was still listed.

Has anyone been able to install it fine?

I have the same problem on vista and server but i didn't search deeply for this. I also tried to integrate it in custom vlite but it show up again on windows update

Using a vlited Vista I also get this problem, the update installs (via windows update) with no visible errors, but then 2 minutes later reappears in the priority update list.

Presumably it's due to a component that's been removed. I'll probably just hide it from the update list for now, since Vista already thinks it's installed 7 times.