Good day everyone, I'm also having the same problem,
I'm using the parallels7 windows for mac,
at first, the update are downloading,
when the time that the parallels prompt up and it need to upgrade,
that was the time when the windows 7 updates where not able to continue downloading,
I am using windows 7 ultimate 32bit,
and for the apple i am using Mac OS X version 10.7.4 (Lion)
and i am using a wi-fi for internet connection,
I already try all the advises from this forum and also at the microsoft,
but seems nothing happen,
please see link for reference
http://imageshack.us/a/img37/7146/graphic1bh.jpg