Windows cannot update

Try running the fixt from here - How to fix MSI software update registration corruption issues - it does also apply to Windows 7!

the link is just under the registry Key you quoted :) Big blue box with a green button :)

with a bit of luck it may have done that already - however, before you reinstall Office 2007, please try this ...
How to uninstall Office 2003, Office 2007 or Office 2010 suites if you cannot uninstall it from Control Panel?

which will get rid of dregs of Office 2010 and 2007 (use both fixits - they are different!)
Once you've done that, run Windows Update and do another Check for updates - what's left to install? Try installing the oldest of the updates there, and see what happens.

NoelDP said:

with a bit of luck it may have done that already - however, before you reinstall Office 2007, please try this ...
How to uninstall Office 2003, Office 2007 or Office 2010 suites if you cannot uninstall it from Control Panel?

which will get rid of dregs of Office 2010 and 2007 (use both fixits - they are different!)
Once you've done that, run Windows Update and do another Check for updates - what's left to install? Try installing the oldest of the updates there, and see what happens.

Okay, ran both tools. There were some hiccups. My system froze when I ran the Office 2007 tool. But I've tried running both tools again several times. The Office 2010 tool ends by saying "This Fix it has been processed." The Office 2007 tool just goes about its business and closes after it's done. When I do a search in the Start menu, there's still some Office Starter 2010 links but none of them work. There are no links for Office 2007.

The oldest update failed again. Same error.

Edit: Almost had good news for you. Just for the heck of it, I tried installing all the updates (there were 29 after uninstalling Office). Most of them failed, but the ones that succeeded required a restart. After restarting, I checked for updates again, and there were only 5. Tried installing them, 3 failed. Then I did a check again, and now there's 17 updates to be installed....

Hey, I found my driver CD with the graphic card driver. Should I attempt a reinstall of the driver?

Well.. it seems some of the Updates have been installed. Around 20 updates left to go, but every time I restart and do a check, the number is different.

But I now have IE 11 :) (which I'm not going to use anyway, lol)

Edit: Down to 15 now.