i only just begun to administrate a windows small business server 2008, set up at another site. first the sbs console cost me nerves, cause it said always something about critical updates which failed.
because of preinstalled wsus 3.0 sp1 it was not possible to search for updates in startmenu, windows updates. as wsus produced tons of wasted disk space and heavy load, i uninstalled it.
when i now search for updates, after some minutes "searching for updates" there appears the error 8000ffff, which i found in your knowledge base.
there is one hint to look for the security of the root directory of c:, if builtin\users has read access; in my case it has already read access; there is another hint to give full access to network service to drive c: (all of it, with all subdirs?); this is not the case on my server, but i am afraid it could open a security hole?
so i attach todays part of windowsupdate.log with the error 8000ffff, please have a look for the reason of the error, i don't want to take unneccessary steps.
after uninstalling wsus, which speeded up the server very much, i also deleted the registry key hklm\software\policy\micro
update as it seems to relate to wsus; but error 8000ffff remained.
there is another article in your knowledge base, 24277961, about windows updates and removing wsus, which tells about the gpo (run gpedit.msc) "specify intranet microsoft update service location"; in my case it is not configured. despite that, error 8000ffff.