That's ok mate, just delete that entry from that key and that'll clear it - although probably worth rebooting afterwards just to see it it comes back?
But saying that, once you've deleted the data out of that entry, just run the following commands at the command prompt:
wuauclt /detectnow
wuauclt /updatenow
That should kick off the Windows Update checks and stuff - see what happens there, maybe worth trying it via the other way you're trying where you get that message too, but at least we're on the right track now :)
If it still errors just pop the new copy of that WindowsUpdate.log online and we can take it from there.