Machine is infected with a rootkit or a virus.
Windows errors can occur for a number of reasons, including programs not installing or uninstalling properly, malware, system conflicts, Active X errors, and the most common, registry errors. PC registry errors occur over time due to the constant writing, editing and deleting of information from your computer's registry over time as programs are installed, modified and removed.
Many malware and spyware programs can also cause unwanted changes to your PC registry, which leads to the errors and reduced PC performance you are likely experiencing. In some cases, registry errors can be occurring without you noticing. They are still harmful and should be fixed regularly.
Download and run Kaspersky TDSSKiller, then download and run Combofix. These two tools will clean-up your machine. The links to download these applications are provided below.
Windows Update should work after that.