http://service1.symantec.com/SUPPORT/sharedtech.nsf/d3c44a1678bd8f45852566aa005902cb/d05d177e36623dbc88256a2900557f5e?OpenDocument&Highlight=0,cannot,upgrade,from,1,to,2

1. Click on Run, Search, For files or folders. Enter: Wininit .exe You will see several files. Delete the Wininit .exe and the Wininit .ini files.

(you don't need to rename these files as doing so only leaves unnecessary file remnants on the C drive and these files are already corrupted, they are not necessary to be able to open Windows and they will be replaced in the extraction process))

2. If you do restart (and it's not necessary) you may see "Windows cannot find Wininit .Exe" and we know why don't we? Just hit enter and windows will open. Right click on "My computer" on the desktop and click "Properties", click on the "Performance" tab, under "Advanced settings" click on File system then click on the "Troubleshooting" tab. Put a check mark on "Disable System Restore" close out and restart. By doing this, you are purging all of the System Restore files which we will reload later.

3. You may need to hit enter again if Windows stops at the "cannot find the Wininit .exe file" notice; it will then open. Please note that following restart your hard drive will be flashing for quite a while, depending on the speed of your computer, as it dumps (purges) out all that old system restore data. Wait until your hard drive is quiet for at least one minute before you do anything. Then go to Start, Run, and type in: "Msconfig" without the quote marks of course (if you don't already have it in your run menu to begin with)

4. In the System Configuration Utility, click on the Extract File box on the General tab. In the "Extract one file from installation disk" dialog box, type "Wininit.exe" (without the quote marks) then click start. (Put your Windows Millennium Edition CD in the drive you wish to use.)

5. In the "Restore from" box type: ":\win9x" for example, D:\win9x if D is your CD Rom.

6. In the "Save file in" box type "C\Windows\" (without the quote mark, assuming that C is the drive where you have Windows installed. If Windows is not installed on the C drive in your computer, indicate the correct drive)

7. Click on OK and the extraction process will begin. It's fast and you should see a box appear that tells you the extraction was successful. Close out, remove your Windows Installation CD from the drive and restart.

8. You will be thrilled to note that Windows will now find Wininit.exe so you should be able to reboot without that irritating notification and pause. Calm down we're almost done. We are going to reload System Restore so right click on "My Computer" and go back to "Properties", click on the "File System" box, then the "Troubleshooting" tab. Make sure the "Disable System Restore" box is unchecked, close out and restart.

9. Just to make double sure that System restore is not going to have any problems go to:
http://support.microsoft.com/?id=290700 and download the 290700usam.exe file and install it.
This is a hotfix for System Restore which corrects several previous System Restore issues. After installing, restart.

10. Click on Start, go to Programs, Accessories, System Tools and click on "System Restore".
Make sure the dot is in the "Restore my computer to an earlier time" and click next. You should see a new "restore point" that was created by the 290700 download. Click cancel.

You have now repaired the System Restore and installed a non-corrupted Wininit.exe file and as a result, should no longer get those irritating "Windows could not upgrade the file %1 from %2" messages every time you download a Windows Update.

Microsoft saya that this problem may be generated by Norton auto "live updates" I suspect a few updates of their own can also cause this problem but don't hold your breath for them to admit it. I have elected to run virus updates manually rather than automatically so that you are not running or installing what may be a conflicting program at the same time which may blow up that wininit.exe file. The same is true of Windows auto update. Make sure nothing else is running and shut down everything including Norton Anti-virus before installing downloads and you should avoid this problem in the future. Keep a copy of this fix folded up in your Windows ME Quick Start Guide.

PS- I have tried hitting enter during the error message like on site said ... and that didnt help at all.

Can't get past the error message and it won't let me get into safe mode no matter what.

To get around the loop problem.

You will need to boot the computer from your floppy with the ME rescue disk. If, like many people. you couldn't be bothered to make one then you need to find a neighbour, friend relation or work collegue who can make one for you.

At this point there is no need to have CD support. When you receive the A:> propmt, type the following...

C:
cd \windows
attrib *.* -h
del wininit.exe
del winint.ini

Do not on any account use the wildcard extension on the del command, There are other files with the same name that will be deleted if you do! Reboot your computer after removing the floppy disk.

If you find that you get the "Blue Screen of Death" at any point, Kick into safe mode again and go to the section for removing programs and take out the one that instigated the loop error in the first place. Reboot and try again. This should get you out of the mire.