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Update 948110 (July SQL Update) fails with exit code 1603

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I am having some issues with using SMS to install Q948110 on SQL 2000. the install runs fine when ran manually but fails with SMS. It seems as if it requires an account with SA privileges to install and SMS is using the System account to install the patches. We are also having the same issue on Q948110 on SQL 2005. I might be completely wrong on this but any help you can provide will be greatly appreciated.
Microsoft Server OSMicrosoft SQL Server 2005

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Microsoft SQL Server 2005
Microsoft SQL Server 2005

Microsoft SQL Server 2005 is a suite of relational database management system (RDBMS) products providing multi-user database access functionality.Component services include integration (SSIS), reporting (SSRS), analysis (SSAS), data quality, master data, T-SQL and performance tuning. It includes support for managing XML data and allows a database server to be exposed over web services using Tabular Data Stream (TDS) packets encapsulated within SOAP (protocol) requests.

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