Make sure you have the Automatic Updates Service set to Automatic and the Background Intelligent Transfer Service set to Manual.
If that doesn't work try copying the following commands to a batch file and running it.
Code:
regsvr32 /S wuapi.dll
regsvr32 /S wuaueng.dll
regsvr32 /S wucltui.dll
regsvr32 /S wups.dll
regsvr32 /S msxml3.dll
regsvr32 /S jscript.dll
regsvr32 /S atl.dll
regsvr32 /S Mshtml.dll
regsvr32 /S Shdocvw.dll
regsvr32 /S Oleaut32.dll
regsvr32 /S Actxprxy.dll
regsvr32 /S initpki.dll
The last thing to try is reinstalling the Windows Installer
http://www.microsoft.com/downloads/details.aspx?familyid=5FBC5470-B259-4733-A914-A956122E08E8&displaylang=en
