I recently ran into this and found a manual repair solution that didn't involve running a system restore. If you get a Vista/Win7 box that autoupdates but won't reboot because it's stuck "configuring updates" on boot.
1.) Get your Vista/Win7 Install DVD
2.) Boot to the DVD
3.) Hit the repair option
4.) Launch the Command Prompt
*All of the above can be done with any live cd that can edit the file system, you just need to be able to rename some files on the drive*
5.) look in c:\windows\winsxs for xml files
6.) You may see Pending.xml, and/or cleanup.xml
7.) rename both files
8.) reboot
It's meant to fix a problem that existed pre SP1 but I just had a vista box do this trying to install SP2, renamed cleanup.xml, reapplied SP2 and the box was happy again.
Many thanks to the following blog article.
http://www.tipandtrick.net/2008/endl...-installation/