What particular update?
0x80070103 - If it is a driver then the driver you are trying to install is already installed or you’re trying to install an older driver.
It is my personal opinion that all drivers should be obtained from the manufacturer's site rather than from Windows Update.
Windows Update error 0x80070103
http://windowshelp.microsoft.com/Windows/en-US/Help/e5f5a9a7-dfeb-46c4-4345-ce26afedabcd1033.mspx
Error message when you try to upgrade a computer to Windows Vista: "This computer does not have enough space for temporary files. Error code 0x80070103"
http://support.microsoft.com/kb/928232
You receive an error when you try to install an updated graphics adapter driver from the Microsoft Update Web site: "Error 0x80070103"
http://support.microsoft.com/kb/952032
TaurArian [MVP] 2005-2010 - Update Services