Microsoft Knowledge Base Article 923101 (Error message when you try to install security update 917283 on a computer that is running Windows Server 2003 x64 Edition: "Error 1324. The folder 'Program Files' contains an invalid character") details a heinous resolution to a problem installing the ASP.NET 2.0 patch covered in Microsoft Security Bulletin MS06-033 - Vulnerability in ASP.NET Could Allow Information Disclosure (917283).
Basically, one needs to "temporarily unmount any drive volumes that you do not require", and the article includes the steps one should go through. The step-by-step instructions only mention "CD-ROM and DVD drive volumes" - I wish the article was clearer on precisely which volumes should be unmounted. Anyway, the next step is installing the the 917283 update, followed by a possible reboot. The last step is to "remount the drive volumes" (assigning the CD-ROM and DVD drive volumes their original drive letters).
I would love to know what the real problem is, and how this fixes it.
Error 1324 (sometimes referenced as -1324) seems to correspond to "The path" or "The folder" or "The folder path" "<path> contains an invalid character", which is the message described in article 923101. According to Windows Installer Error Messages, the message associated with 1324 is "The folder path '' contains an invalid character".
Good thing 923101 only applies to x64 editions of Windows Server 2003.