I recently hooked up TortoiseSVN to the Subtext project to get the latest source code so that I could take a look at some of the inner workings. I knew that the project used the Web Application project type, but I also knew that I had previously installed the Microsoft update and also have VS2005 SP1 installed. Yet I was unable to open the project. Frustrated, I reinstalled VS2005 SP1 except that I kept Outlook open so that I could read my emails while it processed the service pack. After it finished, I closed Outlook and it crashed and asked if I wanted to restart Outlook and I pressed "No." However the next time I started Outlook, it asked me to insert the Visual Studio 2005 setup media.
I've had this happen a year ago or so and I ended up uninstalling and reinstalling Outlook or Visual Studio (I don't remember which), and it looks like I'll have the opportunity to do it again very soon. Unfortunately I haven't found any way to tell why it is asking for the Visual Studio installation media other than bizarre Windows Installer dependencies.
I guess when they recommend that you close all applications (at the very least all Microsoft software) before installing software or service packs, they really aren't kidding.