If you get this error trying to execute Windows Update on a computer, yoiu may probably correct it doing the following steps, ad stated by
paulprovance

Solution:
This problem can be corrected by re-registering the various dll files that Windows Update requires to run.

To do this firstly click on the “Start” button then “Run” and enter the following command into the “Run” dialog box

· regsvr32 wuapi.dll

You should then receive a message to say it was successful. The above process then needs to be done for each of the following commands:-

· regsvr32 wups.dll

· regsvr32 wuaueng.dll

· regsvr32 wucltui.dll

· regsvr32 atl.dll

· regsvr32 msxml3.dll

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If all the above doesn't work, you can try Manually installing the Windows Update Agent, like described in that thread too.
You can find all the Agent versions here: http://support.microsoft.com/kb/946928
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If you even get errors during Agent installation, try to update Windows Installer (Version 4.1 worked for me, on a windows2003R2 server) and restart the system.


Have a nice time :)