We are seeing this across the board as well.
A solution we used to kill the task was:
Create a Run Script task as a batch file:
Manage > Jobs and Tasks > New > Task > Run Script
Script type: Command Script
taskkill /F /IM msxml4-KB2721691-enu.exe /T
This will kill the task, as well as all child tasks related to it. Software Update will then advance on to the next patch. However, you will still be vulnerable to this until you manually add the install switches to the msxml4 patch.