Click on Start, type in services.msc and hit Enter.
The services window should open. Find the service named Windows Update, right click and choose Stop.
Ok now on your computer find this folder:
Right click the Software Distribution folder and choose Delete.
1. Please download the subinacl.msi file from the following link and save the installation patch onto the Desktop:
2. Please go to the Desktop and double click the downloaded file.
3. Please select the C:\Windows\System32 folder as the Destination Folder during the installation. Later we will use this tool to reset the permission settings on the current machine.
Note: If the UAC (User Account Control) window is prompted for permission to continue, please click Continue.
4. Click Start, in the Start Search bar, type: "notepad" (without quotes) and press Enter.
5. Copy the following commands and then paste them into the open Notepad window:
subinacl /subkeyreg HKEY_LOCAL_MACHINE /grant=administrators=f
subinacl /subkeyreg HKEY_CURRENT_USER /grant=administrators=f
subinacl /subkeyreg HKEY_CLASSES_ROOT /grant=administrators=f
subinacl /subdirectories %SystemDrive% /grant=administrators=f
subinacl /subkeyreg HKEY_LOCAL_MACHINE /grant=system=f
subinacl /subkeyreg HKEY_CURRENT_USER /grant=system=f
subinacl /subkeyreg HKEY_CLASSES_ROOT /grant=system=f
subinacl /subdirectories %SystemDrive% /grant=system=f
6. After pasting the above commands, please close the Notepad window. Choose Save when you are prompted to save the file. Type "reset.bat" as the file name and choose Desktop from the left panel as the save location.
7. Refer to the Desktop, right click the reset.bat file, and then choose "Run as administrator."
8. You will see a DOS-like window processing.
Note: It may take several minutes, please be patient. When it completes, you will be prompted with the message: "Finished, press any key to continue".
Then finally run the fix it again at: http://support.microsoft.com/kb/971058
Then restart your computer and once started back up try searching for updates again.