I've found a different way of fixing this error or rather by passing it simply extract the files from the zune package go past the strartzune.exe and into either the folder named x86 or x64 I have have always used x86 then into the packages folder (this next step is easier if you put the view from icons to list) then install these in this order:
dotnetfx.exe
dw20shared.msi
msxml6_x86_sp1.msi
any of the other updates ending in enu.exe
E.x.:windowsxp-kb915865-v11-x86-enu.exe
you don't really have to really have to restart to then install the soft ware by just running zune-x86.msi
personally I've installed it this way on an un updated xp with out any problems.