This was the final step ...
http://support.microsoft.com/kb/2712531
When you install Windows 7 Service Pack 1 (SP1), you may receive the following error message:
Error 0x8024200D
To resolve this issue, uninstall Service Pack 1 by using the DISM command. To do this, follow these steps for your version of Windows 7.
For the 32-bit version of Windows 7
Click Start, and then type cmd in the Search box.
Right-click cmd.exe, and then click Run as administrator.
Type the following command, and then press Enter:
dism.exe /online /remove-package /packagename
ackage_for_KB976932~31bf3856ad364e35~x86~~6.1.1.17514
After the removal is complete, type exit, and then press Enter.
Restart the computer.
For the 64-bit version of Windows 7
Click Start, and then type cmd in the Search box.
Right-click cmd.exe, and then click Run as administrator.
Type the following command, and then press Enter:
dism.exe /online /remove-package /packagename
ackage_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514
After the removal is complete, type exit, and then press Enter.
Restart the computer.
The service pack should download without any issues after this ....