Plagued throughout the internet are the users of Windows 7 whom had attempted to install the service pack 1. However, the installation fails with error code c0000034 and the inability to use the computer. There are many different solutions that seem to exist, however, one has been more successful than the others by a user named thiswoot.

Basically,the goal is to boot the computer, bypass the operating system, edit a file called pending.xml, and restart the computer. This can be achieved using a startup CD/DVD like BartPE, Ultimate Boot CD (UBCD), or some other, but most of us don’t have on handy or don’t have the time to build the BartPE. However, if you happen to have such a disk, it may save a few steps.

The steps provided here are those proposed by thiswoot. This method works without Safe Mode, backups, System Restore, Deployment Image Servicing and Management (DISM), and without a Windows 7 DVD repair disc.

1. Reboot the computer.
2. When your computer starts up, choose option “Launch Startup Repair”
3. When the Startup repair starts, click Cancel.
4. Another box will appear, Click “Don’t Send”
5. Click the link “View advanced options for recovery and support”
6. In the new window click Command Prompt at the bottom.
7. In Command Prompt type this and press enter: %windir%\system32\notepad.exe
8. Notepad will open. In notepad go to File–>Open.
9. Change the type of files notepad views from .txt to All Files.
10. In Notepad, go to C:\Windows\winsxs\ (or where Windows is installed)
11. Find pending.xml and make a copy of it. (If there is no pending.xml, search for a pending.xml with random alpha-numeric characters appened to the end, like for example pending.xml.02cb7d8fb91898697. Copy the file to pending.xml and continue.)
12. Now open the original pending.xml (it will take time load as it is very large)
13. Press CNTRL+F and search for the following exactly: 0000000000000000.cdf-ms
14. Delete the following text (this text will likely vary):
    <Checkpoint/>
    <DeleteFile path=”\SystemRoot\WinSxS\FileMaps\_0000000000000000.cdf-ms”/>
    <MoveFile source=”\SystemRoot\WinSxS\Temp\PendingRenames\e56db1db48d4cb0199440000b01de419._0000000000000000.cdf-ms” destination=”\SystemRoot\WinSxS\FileMaps\_0000000000000000.cdf-ms”/>
    Your PC might not have all 3 sections of code (<Checkpoint>, <DeleteFile>, <MoveFile>). Just make sure you delete section “Checkpoint” and whatever other sections have “000000000000000.cdf-ms”. They will be right next to each other.
15. Save the file, close notepad, close command prompt, restart your computer.

Do a normal startup. Wait patiently, as it may hang for 5-10 minutes at the “starting windows” screen. The Service Pack install will resume. The computer will reboot a few more times and then everything should be working. For some, it reverts everything and cancels the service pack installation. For others, the service pack installation completes. Either result is fine.

Source: http://social.technet.microsoft.com/Forums/en/w7itproinstall/thread/1c9a7151-b48c-4a98-aae7-a4b82682ea8e#bcabda57-7338-499f-aee2-d708e76df315