After your attempt to install Service Pack 1 for Office 2010 fails, you may see this error in your application event log:
You may also see this error as well:
There is nothing wrong with your group policy settings. This problem is with the Windows Installer not having enough contiguous virtual memory to ready large *.msi or *.msp packages. You may get similar errors installing service packs or updates for other large programs besides Office. Fortunately, Microsoft has a fix for this problem. You can read about the issue and download the fix here:
Note: As pointed out in the article, there is no fix available for Windows XP.