KB974417 install fails – working solution!

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I recently installed a new Microsoft WSUS server. Most of it went just fine. Except for a few updates that weren't needed according to windowsupdate.com, but were required according to WSUS.

Especially KB974417 was pretty annoying. I tried installing it a dozen times, but after each reboot, WAU came back telling the update was ready to install. I checked out the eventvwr, and got the following useless message:
Event Type: Error
Event Source: HotFixInstaller
Event Category: None
Event ID: 5000
Date: 3/16/2010
Time: 3:06:25 PM
User: N/A
Computer: PC1
Description:
EventType visualstudio8setup, P1 microsoft .net framework 2.0-kb974417, P2 1033, P3 1642, P4 msi, P5 f, P6 9.0.40302.0, P7 install, P8 x86, P9 w2k3r2, P10 0.

Installing it manually

I downloaded the file from the Microsoft website, to find that the update itself thought itwasn't needed as well: None of the products that are addressed by this software update are installed on this computer. Click Cancel to exit setup.

So what I did:

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