Same thing happened to me when I let MS update my modem driver during Windows Update. It went away when I removed sm56hlpr from the run section of the registry. (I used a standalone msconfig.exe program available for win2000 to remove it although you can hack it out manually going to...
I have been struggling with this for a month and finally solved it! All it took for me is to extract oleaut32.dll from my c:\windows\options\install folder to c:\windows\system using the System Configuration Utility tool (See Microsoft Knowledge Base Article 265371). Bingo, the popups work...
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