I know this thread is old... but I was having the same problem and found a fix and thought I'd share. I was getting the 8007000e error, eventually. This indicated that my computer was having trouble communicating with the microsoft update server. I suspect it's because by this point there are hundreds of updates.
I downloaded and installed the .net 3.5 and 4.0 framework.
I then installed the Windows 7 Update update-- to 7.6 (searched "windows 7 update for windows update).
Then: kb 3102810, and finally kb 3050265
This combination seems to allow a new Win 7 SP 1 install to communicate with the windows update server without problems.