Tried to install SP1 for Visual Studio 2005 via the Windows Update and standalone installation but both failed. After searching the web, I found out that the Windows Installer process has insufficient contiguous virtual memory to verify that the .msi package or the .msp package is correctly signed. The resolution is to install the hotfix http://support.microsoft.com/default.aspx/kb/925336.
Another resource on installing VS 2005 SP1 which is also quite useful.
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