Ok after months of trying I have finally got this error sorted and heres how.
1. Restart your computer into safe mode.
2. Login using the Administrators account
3. In Start, Accessories, right click on Command Prompt, and click on Run as Administrator
4. In DOS type:- net stop cryptsvc
5. Press enter and wait for the computer to say its stop this service
6. Close DOS and remain in Windows Safe Mode.
7. Go into My computer and navigate to your Windows directory
8. Find the folder windows\software distribution and remove the contents, but not the folder its self
9. Then navigate to windows\system32\catroot2 folder and remove the content of that folder
10. Right click on the catroot2 folder and rename it to catroot3
11. Restart windows and login as normal.
12. Once logged into windows run Windows Update from the Start menu. Download and install updates as normal.
13. Nortons Internet 2008 may ask you for permission for Live updates to go online, depends on your setting with Norton.
I hope this works for every one who is still having problems with this error. I did this exact process last night after 6 months with no updates and now my computer is all updated and working fine.
Good luck to you all, and thank you to every one that helped me.