When trying to update SolidWorks I frequently run in to this problem. Only solution I have found is to copy the Toolbox from the server to my local machine, and then change the toolbox settings in SolidWorks to this location. Run the update, then change the setting back and delete the temporary local toolbox. This is really annoying when you hav e several PC's to update.
My toolbox is located on a server, unfortunately using a mapped drive letter. I think this may be the problem. Any ideas?
Edit: Just tried changing the adress to a UNC path, that lets me install the update. Then I can change the path back, as SW sees a file on a mapped drive as a different file from the same path in UNC.