BACKGROUND:

Every machine I install the lastest Windows Update Agent on results in a 800B0001 error when getting updates “FROM YOUR SYSTEM ADMINISTRATOR” but have no problems when getting “UPDATES FROM MICROSOFT UPDATE”.

This is the same as: http://social.microsoft.com/Forums/en-US/partnerwinclient7rc/thread/e64bdfef-f92a-4924-85f1-6b858ec81c59

All of the machines in question are Win 7 64Bit Enterprise and are of varying makes and models (ie. Toshiba R700 laptops, whitebox PC’s…). Machines without the recent Windows Update Agent, work just fine with either my WSUS server or MS Update.

I have run KB949104′s FixIt tool and it does find errors, says it repaired them but the problem still exists and if I run the FixIt tool again, it finds the same errors.

SOLUTION:

This is apparently a known issue Microsoft has a hot fix for.  Below is the process I followed based on what the kbase and Microsoft partner support told me:

All of these instructions are to be performed on the WSUS Server.

1. Download and run Update for Windows Server Update Services 3.0 SP2 for x64-based Systems (KB2720211)
2. After the hotfix is complete, Stop your WWW Service
3. Stop you UPDATE SERVICES Service
4. Perform an IISRESET (which seemed redundant to me, but it does start the WWW service)
5. Start your UPDATE SERVICES

Even though the hotfix did not say it requires a reboot, MS support was quite clear that it did require a reboot.  However, I did not reboot my WSUS server and all is well now