Everyone has seen this error at least once or more. Sometimes it fixes itself other times you have figure out the problem. Granted there are other fixes but this works for me so think of it as another thing to try before banging your head on the wall.
The error you see is:
--------From logfile SmsWusHandler-----
The program for advertisement "SMS20002" failed ("SMS00032" - "Microsoft Updates Tool"). The failure description was "11412". User context: NT AUTHORITY\SYSTEM
The client refused to update to the new windows update client (V3)
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First I try manually running the scan agent (SmsWusHandler.exe /Catalog:C:\WINDOWS\system32\VPCache\SMS00032\wsusscn2.cab /OutputXml:C:\WINDOWS\system32\VPCache\SMS00032\Results.xml)
If I receive the error about an invalid folder then I follow these steps...
First looking at the client data it says that it hasn't been patched in 1 month, but a manual scan will confirm that it is patching and that the only problem is the scan function and reporting it back to the SMS server.
Checking the vpcache folder reveled that the new cab file and new ITMU had downloaded but the windows update function didn't install correctly.
I went to my WUSPkgSource folder and manually run the WindowsUpdageAgent30-x86.exe to force the update on the client.
Once that was done I again ran the scan agent manually, this time it succeeded and all is now well with the client.
This error
Local WUS client version = 5.8.0.2469. Required version = 5.8.0.2678
Now shows as:
WUS client version detected on the machine = 5.8.0.2694.
A HW invetory returns the data to SMS and another client is backup and running.
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Once you have tested it on a machine and you have determined that this is the way to solve the problem you can easily send this down as an adv to the affected computers. This can be 100% automated. But remember this error can have 20 different solutions. Once you find the one that works lets hope it will solve it on all the systems.