Two days ago I ran across a perplexing post by
I totally fubared on my initial advice to her, which led me to do a bit of research.
Searching Microsoft for that error comes up with nothing. Searching the Internet provided hundreds of posts describing the same exact problem, with conflicting advice from others - some of which was close, but none that were complete or reliable solutions. I decided to try and reproduce the problem myself - then find a solution.
The problem is multi-part and started with a recent update (January I believe) from Microsoft that was supposed to reduce CPU overhead when Automatic Update ran. Unfortunately, it appears that there was a bug in that patch that corrupts the Windows Software Distribution folders. Once it gets into this state, all updates - Automatic or Manual - will fail.
Here is the fix. Be warned, parts of this process will take a while, so if you do this on a Laptop, make sure you're plugged in . . .
1) Right click My Computer >> Properties >> Automatic Updates and turn it OFF. Click OK back out.
2) Start button >> Run and type in CHKDSK C: /R then press enter. Answer Y when it asks you if you want to run it at the next reboot. But don't reboot just yet.
3) Go to http://support.microsoft.com/kb/927891/ and find the link for the version of Windows you are running under RESOLUTIONS, then download the hotfix.
4) Install the hotfix you just downloaded and reboot. Wait for that CHKDSK you did in step 2 to complete - go take a break as it will take a while.
5) Right click My Computer >> Manage >> Services and Applications >> Services. Find both the "Automatic Updates" and "Background Intelligent Transfer Service" and right click them >> Stop. Make sure that both services show a stopped status in the Management window.
6) Open My Computer (double left click) and browse into C:\Windows (click the warning about system files to clear it out if you get it) and find the folder named "SoftwareDistribution". Rename that folder to "$SoftwareDistributionOLD$".
7) Reboot again, and try using http://update.microsoft.com/ . . . it should work now.
8) If it succeeds, go ahead and turn Automatic Updates back on if you are so inclined. Reverse the directions in step 1.
Please comment below on your results if you try this.