That error code makes more sense! Having Googled it there are a couple of things it could be but most point to a Software Licensing Service being disabled on your computer. Try This:

Click on the Start Button and in the search box just above it type services.msc - when it appears in the list above right click it and select run as administrator. Scroll down to Software Licensing and double click it to open the Properties window. Make sure that the Start Up Type is set to automatic and the service Status is Started - If not click the start button, click apply and then OK.

Whilst we`re there check that Cryptographic Services and Remote Procedure Call (RPC) are set the same way.

Now restart Windows Updates and post back with any further messages.

Check DCOM Services Launcher that should also be Auto and started. (I`m looking at the dependencies tab for each of the services and DCOM must be running for Cryptographic services)

Do you have Vista SP1 installed by the way?

Back to square one then. I`m out for this evening but in the meantime try this. Start button and in the search box just above type "run" without quotes. When it appears above right click and choose "Run as Administrator" - type "cmd" in the run box then OK. This will open a command window. Type "sfc /scannow", again without quotes and noting the space between c and /. It may take some time. Reboot and try windows updates again.

If this doesn`t work take a look in the Update History from the Windows Update Window. You can look at the error messages against failed updates from there - there might be some other clues.