Lately I've been having problems with Microsoft Update on several computers. It seemed to be different problems on different computers, and an update would sometimes appear to work but then not, making the OS lock up. Anyway, I finally did a little digging and found a helpful MS KB article that helped me fix the issue on my computers.

There are two recommended solutions:

1. Re-Register a COM DLL: regsvr32 %windir%\system32\wups2.dll 
2. Install Windows Update Agent: x86 download

I hope it saves you some time.