Using Firefox you can update Windows XP with
WindizUpdate.
But first you should check for hardware problems. A failing hdd can cause some strange behaviour. Run
chkdsk /f x: from a cmd prompt to check every drive for errors (/f means fix errors, replace
x with the corresponding drive letter). It might complain that the volume is in use by an other process and give you the option to check the next time you restart your system. In that case answer yes and do so.
You can also scan your hdd with a tool from the hdd manufacturer. Usually these require a DOS bootdisk. With these tools you can test a drive very rigorously.
You can check your RAM with
memtest.
Certain USB devices can also cause the "Generic Host Process for Win32 Services" error. Try disconnecting all USB devices. Keeping a USB mouse connected should be okay (mice are pretty dumb hardware anyway). Especially USB scanners and certain USB-DSL-modems cause problems (see one of the Microsoft links posted earlier).
You can also try to disconnect any internal hardware you do not actually need to run your system. A very basic system would be cpu/memory/graphics card/harddrive you boot windows from and no CD/DVD drives, soundcards, network card etc. Then by trial and error determine if one of the components causes the error. Admittedly, this is not very workable if the error only pops up after 7 days or so...