To resolve the problem open the C:\windows\system32 folder and rename the file msxml4.dll to msxml4.orig.
You can do the same from command line as follows:
1. click Start – Run and type “cmd”
2. Run the following command and ignore any error messages.
c:\> ren %windir%\System32\msxml4.dll msxml4.orig
Now, manually download and install the KB936181 from here to fix the problem.