Error 1635 occurs when you try to install a Windows Installer patch

SYMPTOMS
When you try to install a Microsoft Windows Installer patch on your Microsoft Windows NT 2000-based computer, the installation fails. You may receive an error message that is similar to the following:
1635 This patch package could not be opened. Verify that the patch package exists and that you can access it, or contact the application vendor to verify that this is a valid Windows Installer patch package.

A Windows Installer patch is also known as an .msp file.

CAUSE
This problem may occur if all the following conditions are true:

• You are using roaming profiles.
• More than one patch has been applied to a product.
• Each patch is in a different network path.  

RESOLUTION
Service pack information
To resolve this problem, obtain the latest service pack for Windows 2000. For additional information, click the following article number to view the article in the Microsoft Knowledge Base:

How to obtain the latest Windows 2000 service pack

Hotfix information
A supported hotfix is now available from Microsoft, but it is only intended to correct the problem that is described in this article. Only apply it to systems that are experiencing this specific problem. This hotfix may receive additional testing. Therefore, if you are not severely affected by this problem, we recommend that you wait for the next Windows 2000 service pack that contains this hotfix.

Date                 Time   Version                   Size             File name
-------------------------------------------------------------------------------------
13-Mar-2003  19:46  2.0.2600.1183   2,017,792      Msi.dll         
11-Mar-2003  16:01  2.0.2600.1183      64,512        Msiexec.exe     
13-Mar-2003  19:46  2.0.2600.1183     305,664       Msihnd.dll      
13-Mar-2003  19:46  2.0.2600.1183     847,872       Msimsg.dll      
11-Mar-2003  16:01  2.0.2600.1183      39,936        Msisip.dll

STATUS
Microsoft has confirmed that this is a problem in the Microsoft products that are listed in the "Applies to" section. This problem was first corrected in Windows 2000 Service Pack 4.

Source: Microsoft Support