Problem: Auto update or visiting the MS update site, searching for updates maxes svchost at 100% CPU with no search results [seems stuck in a loop].
Why: Seems ie8 needs updated for MS update to work, but the ie8 updates are included in the updates you can't find because update won't work.
Fix: Download & install the updates manually, which unfortunately is harder than it should be because MS says to use their broken update site. What I did...
I found this page that lists the contents of their update DVD ISO -- http://www.microsoft.com/en-us/download/details.aspx?id=41137
Under Details it lists the updates -- clicking on the KB heading take you to the svc bulletin page -> clicking on the link for it pros takes you to another page where you can click on the link for your Windows version. The one exception I found was a 404 page error for KB2868626 -- the link for the XP version is http://www.microsoft.com/en-us/download/details.aspx?id=40915
Note that you may have to kill svchost in Task Mgr if it's maxed out in order to manually install [or during install of] updates -- instead you might want to temporarily turn auto updates off, though it may take a restart to prevent svchost from maxing out the CPU.
The updates I added manually, after which MS update worked fine -- KB2888505, KB2868626, KB2900986 -- YMMV, you may not need all 3 as I didn't try MS update after installing each one.
Note also that optional win7 update KB2830477 breaks the win7 Virtual PC host.