Well, if you have been one of those unfortunate few who have mistakenly purchased a pirated copy of Windows XP off some rogue trader, then you can only try Windows Update and see if it works. If updates are displayed then it is safe to download and install them. As far as I am aware no update from Microsoft, not even SP1 will damage your system or OS installation, it will at the very worst, just not install. So there is nothing to worry about in that department.
As for your IE problem. The below should help you out.
Cheers
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1) Start - Run and type regedit.
2) See if this key is present:
HKEY_CURRENT_USER\Software\Policies\Microsoft\InternetExplorer\Control Panel\HomePage
3) If it is, delete it and reboot.
or...
1) Start - Run - type regedit and press ok.
2) Click on the + signs to the left to follow this path:
HKEY_CURRENT_USER - Software - Microsoft - Internet Explorer - Main
3) In the right-hand pane, you'll see a string with a value name of
Start Page. Double-click on it to bring up the edit box, then enter the homepage - e.g.
http://www.short-media.com
4) OK it and close the registry editor.
