The option is already there. You can tell Windows Update to stop alerting you about a particular update.
I do not see any way to tell it to stop alerting me on "a particular update" - I only see options for getting no updates or no new software notices. I want to get updates, then select the ones I want (which is clear), and also be able to tell it to stop asking about ones I do not want (in this case, Windows Live Essentials, which I consider Non-Essential).
go to the update you wish not to have anymore.
right click on the update and the option to hide update should appear.
select hide update and you will notice the update grey scale out and it will no longer be available to you unless you re-enable it.
FYI - if you have windows live and the package it comes with then it's not a bad update..