I tried installing MSXML 4.0 SP1 on the machine. But it didn't solve the issue.
Below you can find the log from today after I checked for update? I did a check for updates at 13:39. Below that I added a few other log lines before that as well.
2010-04-20 13:39:54:374 932 1304 AU Triggering AU detection through DetectNow API
2010-04-20 13:39:54:374 932 1304 AU Triggering Online detection (interactive)
2010-04-20 13:39:54:374 932 9ec AU #############
2010-04-20 13:39:54:374 932 9ec AU ## START ## AU: Search for updates
2010-04-20 13:39:54:374 932 9ec AU #########
2010-04-20 13:39:54:374 932 9ec AU <<## SUBMITTED ## AU: Search for updates [CallId = {859EE30D-0304-4464-AE74-DE01E5B0F36C}]
2010-04-20 13:39:54:374 932 1320 Agent *************
2010-04-20 13:39:54:374 932 1320 Agent ** START ** Agent: Finding updates [CallerId = AutomaticUpdates]
2010-04-20 13:39:54:374 932 1320 Agent *********
2010-04-20 13:39:54:374 932 1320 Agent * Online = Yes; Ignore download priority = No
2010-04-20 13:39:54:374 932 1320 Agent * Criteria = "IsInstalled=0 and DeploymentAction='Installation' or IsPresent=1 and DeploymentAction='Uninstallation' or IsInstalled=1 and DeploymentAction='Installation' and RebootRequired=1 or IsInstalled=0 and DeploymentAction='Uninstallation' and RebootRequired=1"
2010-04-20 13:39:54:374 932 1320 Agent * ServiceID = {3DA21691-E39D-4DA6-8A4B-B43877BCB1B7} Managed
2010-04-20 13:39:54:374 932 1320 Agent * Search Scope = {Machine}
2010-04-20 13:39:54:374 932 1320 Setup Checking for agent SelfUpdate
2010-04-20 13:39:54:374 932 1320 Setup Client version: Core: 7.3.7600.16385 Aux: 7.3.7600.16385
2010-04-20 13:39:54:374 932 1320 Misc Validating signature for C:\Windows\SoftwareDistribution\SelfUpdate\wuident.cab:
2010-04-20 13:39:54:389 932 1320 Misc Microsoft signed: Yes
2010-04-20 13:39:54:389 932 1320 Misc WARNING: WinHttp: WinHttpCrackUrl failed. error 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Misc WARNING: WinHttp: Initialize failed with 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Misc WARNING: WinHttp: WinHttpCrackUrl failed. error 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Misc WARNING: WinHttp: Initialize failed with 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Misc WARNING: WinHttp: WinHttpCrackUrl failed. error 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Misc WARNING: WinHttp: Initialize failed with 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Misc WARNING: WinHttp: WinHttpCrackUrl failed. error 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Misc WARNING: WinHttp: Initialize failed with 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Misc WARNING: DownloadFileInternal failed for AGR-SRV-WSUS/selfupdate/wuident.cab: error 0x80072ee6
2010-04-20 13:39:54:389 932 1320 Setup WARNING: SelfUpdate check failed to download package information, error = 0x80072EE6
2010-04-20 13:39:54:389 932 1320 Setup FATAL: SelfUpdate check failed, err = 0x80072EE6
2010-04-20 13:39:54:389 932 1320 Agent * WARNING: Skipping scan, self-update check returned 0x80072EE6
2010-04-20 13:39:54:389 932 1320 Agent * WARNING: Exit code = 0x80072EE6
2010-04-20 13:39:54:389 932 1320 Agent *********
2010-04-20 13:39:54:389 932 1320 Agent ** END ** Agent: Finding updates [CallerId = AutomaticUpdates]
2010-04-20 13:39:54:389 932 1320 Agent *************
2010-04-20 13:39:54:389 932 1320 Agent WARNING: WU client failed Searching for update with error 0x80072ee6
2010-04-20 13:39:54:389 932 860 AU >>## RESUMED ## AU: Search for updates [CallId = {859EE30D-0304-4464-AE74-DE01E5B0F36C}]
2010-04-20 13:39:54:389 932 860 AU # WARNING: Search callback failed, result = 0x80072EE6
2010-04-20 13:39:54:389 932 860 AU # WARNING: Failed to find updates with error code 80072EE6
2010-04-20 13:39:54:389 932 860 AU #########
2010-04-20 13:39:54:389 932 860 AU ## END ## AU: Search for updates [CallId = {859EE30D-0304-4464-AE74-DE01E5B0F36C}]
2010-04-20 13:39:54:389 932 860 AU #############
2010-04-20 13:39:54:389 932 860 AU Successfully wrote event for AU health state:0
2010-04-20 13:39:54:389 932 860 AU AU setting next detection timeout to 2010-04-20 16:39:54
2010-04-20 13:39:54:389 932 860 AU Successfully wrote event for AU health state:0
2010-04-20 13:39:54:389 932 860 AU Successfully wrote event for AU health state:0
2010-04-20 13:39:59:397 932 1320 Report REPORT EVENT: {741C8C46-3179-401C-A2F1-1697349B6F0E} 2010-04-20 13:39:54:389+0200 1 148 101 {D67661EB-2423-451D-BF5D-13199E37DF28} 1 80072ee6 SelfUpdate Failure Software Synchronization Windows Update Client failed to detect with error 0x80072ee6.
2010-04-20 13:39:59:397 932 1320 Report CWERReporter::HandleEvents - WER report upload completed with status 0x8
2010-04-20 13:39:59:397 932 1320 Report WER Report sent: 7.3.7600.16385 0x80072ee6 D67661EB-2423-451D-BF5D-13199E37DF28 Scan 101 Managed
2010-04-20 13:39:59:397 932 1320 Report CWERReporter finishing event handling. (00000000)
Part of the log before that:
2010-04-20 12:41:32:654 932 590 PT WARNING: PTError: 0x80072ee6
2010-04-20 12:41:32:654 932 590 PT WARNING: Initialization failed for Protocol Talker Context: 0x80072ee6
2010-04-20 12:41:32:654 932 590 Report WARNING: Reporter failed to upload events with hr = 80072ee6.
2010-04-20 12:47:35:027 932 9ec AU #############
2010-04-20 12:47:35:027 932 9ec AU ## START ## AU: Search for updates
2010-04-20 12:47:35:027 932 9ec AU #########
2010-04-20 12:47:35:027 932 9ec AU <<## SUBMITTED ## AU: Search for updates [CallId = {EC4FD2F6-5BB1-440D-84A9-FB1574352B9F}]
2010-04-20 12:47:35:027 932 590 Agent *************
2010-04-20 12:47:35:027 932 590 Agent ** START ** Agent: Finding updates [CallerId = AutomaticUpdates]
2010-04-20 12:47:35:027 932 590 Agent *********
2010-04-20 12:47:35:027 932 590 Agent * Online = Yes; Ignore download priority = No
2010-04-20 12:47:35:027 932 590 Agent * Criteria = "IsInstalled=0 and DeploymentAction='Installation' or IsPresent=1 and DeploymentAction='Uninstallation' or IsInstalled=1 and DeploymentAction='Installation' and RebootRequired=1 or IsInstalled=0 and DeploymentAction='Uninstallation' and RebootRequired=1"
2010-04-20 12:47:35:027 932 590 Agent * ServiceID = {3DA21691-E39D-4DA6-8A4B-B43877BCB1B7} Managed
2010-04-20 12:47:35:027 932 590 Agent * Search Scope = {Machine}
2010-04-20 12:47:35:027 932 590 Setup Checking for agent SelfUpdate
2010-04-20 12:47:35:043 932 590 Setup Client version: Core: 7.3.7600.16385 Aux: 7.3.7600.16385
2010-04-20 12:47:35:043 932 590 Misc Validating signature for C:\Windows\SoftwareDistribution\SelfUpdate\wuident.cab:
2010-04-20 12:47:35:059 932 590 Misc Microsoft signed: Yes
2010-04-20 12:47:35:059 932 590 Misc WARNING: WinHttp: WinHttpCrackUrl failed. error 0x80072ee6
2010-04-20 12:47:35:059 932 590 Misc WARNING: WinHttp: Initialize failed with 0x80072ee6
2010-04-20 12:47:35:059 932 590 Misc WARNING: WinHttp: WinHttpCrackUrl failed. error 0x80072ee6
2010-04-20 12:47:35:059 932 590 Misc WARNING: WinHttp: Initialize failed with 0x80072ee6
2010-04-20 12:47:35:059 932 590 Misc WARNING: WinHttp: WinHttpCrackUrl failed. error 0x80072ee6
2010-04-20 12:47:35:059 932 590 Misc WARNING: WinHttp: Initialize failed with 0x80072ee6
2010-04-20 12:47:35:059 932 590 Misc WARNING: WinHttp: WinHttpCrackUrl failed. error 0x80072ee6
2010-04-20 12:47:35:059 932 590 Misc WARNING: WinHttp: Initialize failed with 0x80072ee6
2010-04-20 12:47:35:059 932 590 Misc WARNING: DownloadFileInternal failed for AGR-SRV-WSUS/selfupdate/wuident.cab: error 0x80072ee6
2010-04-20 12:47:35:059 932 590 Setup WARNING: SelfUpdate check failed to download package information, error = 0x80072EE6
2010-04-20 12:47:35:059 932 590 Setup FATAL: SelfUpdate check failed, err = 0x80072EE6
2010-04-20 12:47:35:059 932 590 Agent * WARNING: Skipping scan, self-update check returned 0x80072EE6
2010-04-20 12:47:35:074 932 590 Agent * WARNING: Exit code = 0x80072EE6
2010-04-20 12:47:35:074 932 590 Agent *********
2010-04-20 12:47:35:074 932 590 Agent ** END ** Agent: Finding updates [CallerId = AutomaticUpdates]
2010-04-20 12:47:35:074 932 590 Agent *************
2010-04-20 12:47:35:074 932 590 Agent WARNING: WU client failed Searching for update with error 0x80072ee6
2010-04-20 12:47:35:074 932 13e8 AU >>## RESUMED ## AU: Search for updates [CallId = {EC4FD2F6-5BB1-440D-84A9-FB1574352B9F}]
2010-04-20 12:47:35:074 932 13e8 AU # WARNING: Search callback failed, result = 0x80072EE6
2010-04-20 12:47:35:074 932 13e8 AU # WARNING: Failed to find updates with error code 80072EE6
2010-04-20 12:47:35:074 932 13e8 AU #########
2010-04-20 12:47:35:074 932 13e8 AU ## END ## AU: Search for updates [CallId = {EC4FD2F6-5BB1-440D-84A9-FB1574352B9F}]
2010-04-20 12:47:35:074 932 13e8 AU #############
2010-04-20 12:47:35:074 932 13e8 AU Successfully wrote event for AU health state:0
2010-04-20 12:47:35:074 932 13e8 AU AU setting next detection timeout to 2010-04-20 15:47:35
2010-04-20 12:47:35:074 932 13e8 AU Successfully wrote event for AU health state:0
2010-04-20 12:47:35:074 932 13e8 AU Successfully wrote event for AU health state:0
2010-04-20 12:47:40:066 932 590 Report REPORT EVENT: {B7F9094C-3FE2-4629-9B1A-1E4DB1DB51F3} 2010-04-20 12:47:35:059+0200 1 148 101 {D67661EB-2423-451D-BF5D-13199E37DF28} 1 80072ee6 SelfUpdate Failure Software Synchronization Windows Update Client failed to detect with error 0x80072ee6.
2010-04-20 12:47:40:129 932 590 Report CWERReporter::HandleEvents - WER report upload completed with status 0x8
2010-04-20 12:47:40:129 932 590 Report WER Report sent: 7.3.7600.16385 0x80072ee6 D67661EB-2423-451D-BF5D-13199E37DF28 Scan 101 Managed
2010-04-20 12:47:40:129 932 590 Report CWERReporter finishing event handling. (00000000)
2010-04-20 12:56:45:669 932 590 PT WARNING: PTError: 0x80072ee6
2010-04-20 12:56:45:669 932 590 PT WARNING: Initialization failed for Protocol Talker Context: 0x80072ee6
2010-04-20 12:56:45:669 932 590 Report WARNING: Reporter failed to upload events with hr = 80072ee6.
2010-04-20 13:08:56:682 932 590 PT WARNING: PTError: 0x80072ee6
2010-04-20 13:08:56:682 932 590 PT WARNING: Initialization failed for Protocol Talker Context: 0x80072ee6
2010-04-20 13:08:56:682 932 590 Report WARNING: Reporter failed to upload events with hr = 80072ee6.
2010-04-20 13:08:56:682 932 590 Report WARNING: Discarding a batch of 1 events because they have expired.
2010-04-20 13:08:56:698 932 590 PT WARNING: PTError: 0x80072ee6
2010-04-20 13:08:56:698 932 590 PT WARNING: Initialization failed for Protocol Talker Context: 0x80072ee6
2010-04-20 13:08:56:698 932 590 Report WARNING: Reporter failed to upload events with hr = 80072ee6.
2010-04-20 13:23:17:734 932 590 PT WARNING: PTError: 0x80072ee6
2010-04-20 13:23:17:734 932 590 PT WARNING: Initialization failed for Protocol Talker Context: 0x80072ee6
2010-04-20 13:23:17:734 932 590 Report WARNING: Reporter failed to upload events with hr = 80072ee6.
Is this what you meant?