Check if the two services are running, Windows Update and Background Intelligent Transfer Service.
Also, try to use Microsoft Fixit:
http://support.microsoft.com/fixit
Also, sometimes windows thinks the service is not running when it really is. So you can try:
1. Stop the Windows Update service on your Windows 7
Go to
Start. Type
services.msc in search box.Press Enter
Windows Service dialog will appear. Scroll to
Windows Update service and right click to select the Stop option.
2. Go to folder with path
C:\Windows\SoftwareDistribution\ . Delete all the files and folder within this folder.
3. Once you have deleted the contents, go back to services dialog and similar to step 1, start the Windows Update service. All the files and folders will be recreated.