Windows update problem-Files required are no longer registered

Today I went to do a Windows update and got the following message:
"Files required to use Microsoft Update are no longer registered or installed on your computer"
It gave me two options:
1. Register or reinstall the files for me now (Recommended)
2. Let me read about more steps that might be required to solve the problem
When I use the 1st option I get the msg: 403 - Forbidden: Access is denied.
When I use the 2nd option I'm sent to a Microsoft site that provides for an
automatic download of the latest update program. That link downloaded the
Microsoft Update program for me and immediately gave me the same message:
"Files required to use Microsoft Update are no longer registered or installed on your computer"
I get the same problem on my wife's user ID.
I went to Add or Remove- tried to add "Windows Update" from Microsoft programs and got
the same messages again.
Do you know of any way to fix this dilemma?
I ran a MalwareBytes log and put it below, if it's of any use.
A recent virus scan showed nothing.
Thanks for any help.
++++++++++++++++++++++++++++
Malwarebytes' Anti-Malware 1.41
Database version: 2947
Windows 5.1.2600 Service Pack 3

10/12/2009 11:45:41 AM
mbam-log-2009-10-12 (11-45-41).txt

Scan type: Quick Scan
Objects scanned: 147963
Time elapsed: 9 minute(s), 15 second(s)

Memory Processes Infected: 0
Memory Modules Infected: 0
Registry Keys Infected: 0
Registry Values Infected: 0
Registry Data Items Infected: 0
Folders Infected: 0
Files Infected: 0

Memory Processes Infected:
(No malicious items detected)

Memory Modules Infected:
(No malicious items detected)

Registry Keys Infected:
(No malicious items detected)

Registry Values Infected:
(No malicious items detected)

Registry Data Items Infected:
(No malicious items detected)

Folders Infected:
(No malicious items detected)

Files Infected:
(No malicious items detected)

Edited by zoots, 13 October 2009 - 06:03 AM.