COMPUTER WORLD
Reports are piling in from afar that Windows Update in Win7 is broken. My first sighting was late Sunday afternoon, when KarenS posted on the AskWoody Lounge:
When I clicked on the Windows Update icon today to start the updates it said that my computer was up to date and that there were no updates available which I know was not the truth because I hadn’t installed any of the [recent ones]
KarenS reported that the machine would only regurgitate the message shown in the screenshot.

There was an attempt to isolate the problem on KarenS’s computers, to no avail — the update service was working fine.
Source: COMPUTER WORLD