The subject behavior will occur if the Iuident.cab file in the Windows Update temp folder is corrupted or missing.

To resolve this problem:

1. Copy / Paste the Following to a FixIuident.bat file:

@echo on
if exist "%ProgramFiles%\WindowsUpdate\V4\temp\Iuident.cab" del /q "%ProgramFiles%\WindowsUpdate\V4\temp\Iuident.cab"
copy "%ProgramFiles%\WindowsUpdate\V4\Iuident.cab" "%ProgramFiles%\WindowsUpdate\V4\temp\*.*"
@ping -n 4 127.0.0.1>nul
2. Double-click the FixIuident.bat file.