Hi Mystified1,
Your original post made no mention of which version of Office 2003 you were using. The problem description you gave suggested you might be trying to apply the update using the wrong set of installation disks, since SKU1CA.cab is only found in the Small Business Edition.
If you are indeed trying to update the Small Business Edition, another possible cause is that you're trying to apply the update on an original (pre SP1) Windows XP network. Again, you haven't said whether that might be the case. See:
http://support.microsoft.com/kb/818234/en-us
See also:
http://support.microsoft.com/kb/310777/en-us
http://support.microsoft.com/kb/825933/en-us