Sometimes Fairly often, lately it seems, you need to clear the Windows Update download directory. It could be that there's an update that keeps failing to install or no new updates will come down because something is funky. My new policy for any kind of problem with Windows Update is to just blow away the SoftwareDistribution folder as the first thing I try. It seems to work most of the time.
To clean the Windows Update SoftwareDistribution folder run the following commands in an elevated(Run As Administrator) PowerShell session: