Following reports that repairing Windows XP with a Windows disk stops Windows Update from working properly, there's a response from the Windows Vista Blog team and a fix fresh from Microsoft Technet (the part of Microsoft dedicated to those dedicated souls who keep Windows networks running).

This does not affect computers that have been restored to their original state using a disc from the manufacturer only from the recovery console.

I've used repair several times and it's often a good option to try as it normally keeps software and files intact. My problem will be remembering to use this fix if I ever have to repair a computer.