My guess is that your internet connection is timing out befoer it gets the whole update file list. So it's erroring when trying to parse a half downlaoded XML file.
Suggestions would be to try reinstalling .NET framework, probably the 2.0 beta of it.
http://www.microsoft.com/downloads/d...displaylang=en
I'll be updating the traditional zip download soon, so you could download it if you still can't use the auto-updater. It'd be better to not give up on it though; I'll keep brainstorming. I have a good idea of what the problem is, just am not sure what's needed to fix it.
Quib