You Sir have a failing HD! Gratz. BACK UP YOUR JUNK,
Bad Sectors - most of the time - are the start of a failure. Your going to want to backup that drive (Which you should have anyway, stupid not to) or clone it. Tons of software for cloning HDDs.
As for the failed updates, that could be a number of events...If windows is installed on a different HDD I would download Microsoft Fix It (Fix the problem with Microsoft Windows Update that is not working) and run the Windows Update Troubleshooter. Unless there is something really wrong that combination will fix most anything wrong with Windows Update. If it is on the failing HDD then replace the HDD, install Windows, enjoy working updater again.
How do I know this: Geek Squad Advanced Repair Agent (2Yrs)
EDIT: Should have read more closely. You tried fix it... Try the trouble shooter. If that doesn't work, get the error code and post it.
