I believe there are a lot of guys suffering this, but unfortunately, I am the only one in my office. Yes, after reinstalling my computer, I suddenly notice I cannot use Windows Update without an error, and even fail to install Windows Live tools.
It is this post that finally saves me this afternoon. Hope it helps when you meet this issue, too.
http://en.kioskea.net/forum/affich-9218-sp3-stopped-windows-update-working