We have gotten a knowledge base article written and published based on some of our findings regarding the component registration errors that some folks have seen while trying to install Update Rollup 2 for Media Center 2005. You can find the article at this location. This KB article covers the items I have previously written about in my blog here, here and here.
We are also working on updating the installation logic used by Windows Update to better detect this inconsistent .NET Framework installation state where .NET Framework 1.1 is installed but the version number of %windir%\system32\mscoree.dll is 1.0.3705.6018. We hope to have this change tested and published in the near future so that future installations of Update Rollup 2 will not be susceptible to this problem.