WSUS on Windows Server 2008 not downloading updates

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On an SBS 2008 box that only a few days old, WSUS was unable to fully download updates with errors including:

— “This update cannot be approved for installation because its Microsoft Software License Terms are still downloading”

and,

— “This update cannot be approved for installation because its Microsoft Software License Terms failed to download. Click Retry Download to start the download again.”

I checked all the WSUS ACLs (file permissions) and the usual things, but none of that helped. For me, only updating BITS did: http://support.microsoft.com/kb/960568. After installing and restarting, I was able to approve these updates.