REboot your machine, keep hitting F8 and go into safe mode, then....
From http://answers.microsoft.com/en-us/windows/forum/windows_vista-windows_update/latest-vista-update-stuck-in-stage-3restart-loop/2f70b13c-9db4-4bf9-90ee-7ca63a809973
Use the System Recovery options to rename the Pending.xml file and edit
the registry:
On the System Recovery Options page, click Command Prompt.
Type cd C:\windows\winsxs, and then press ENTER.
Type ren pending.xml pending.old, and then press ENTER.
Type regedit, and then press ENTER.
Select HKEY_LOCAL_MACHINE.
On the File menu, click Load Hive.
Locate the following folder:
C:\windows\system32\config\components
When you are prompted for a name, type Offline_Components.
In Registry Editor, locate and then delete the following registry
subkey:
HLKM\Offline Components\AdvancedInstallersNeedResolving
HKLM\Offline Components\PendingXmlIdentifier
Exit Registry Editor:
At the command prompt, type exit to exit Registry Editor.
Press ENTER.
Click Restart.
Also, refer to this
http://support.microsoft.com/kb/949358
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