One of the likely reasons for this (assuming your internet connection is working, no firewall is interfearing, etc) is that the "Background Intelligent Transfer Service" service is not running correctly. To fix it just type in "Services" into the "Search Programmes and Files" box on the start menu and find the offending services;
As you can see in the screen shot above it's saying "Started" and "Manual". It should say "Started" and "Automatic (Delayed Start)" but I've just fixed this problem on my own system and it won't start saying "Automatic" until after I've rebooted.
If the service won't start (mine wouldn't) then double-clicking it it will bring up the properties, then if you click on the "Dependencies" tab;
|Background Intelligent Transfer Service Properties|
The two services I've highlighted above both need to be running. When you got everything running you should be able to use Windows Update as normal.
Hope this helps!