Would you happen to know if you are hiding language updates? There are around 32 of those.
There are several threads about Windows Update problems, including explaining what log files might help and how to get them. The error you show seems to be a corrupt file.
The log files may give a clue, but several things could be at work. One is your internet connection, which seems to be essential for Windows 7. Even had one poster that had switched to DSL for his internet and was able to download XP updates but not Windows 7.
One of the services may be missing or not running. Perhaps opening an administrative command prompt and typing SFC /scannow would restore some system file that might be having a problem.
Some folks have chosen to rename the SoftwareDistribution folder in the Windows folder. This will cause the system to rebuild the update system, but this should not be done first. But if something has gotten corrupted, it might correct it.
If you want, open the WindowsUpdate.log in the Windows folder and copy the last few days worth of entries and attach as a text file using the paperclip. If you believe the last updates were around 3/11, then you might want to include a few starting there also. The ReportingEvents.log in the Windows\SoftwareDistribution folder might give some information as to the last updates installed. Some of these may need to be copied to the desktop to be able to open.
There are other procedures suggested online and several at Microsoft.