The solution is not that hard I think. It's BITS that's malfunction here! Just follow these steps to make it functional again:
- Logon to the ConfigMgr server (which in my case is also the WSUS server)
- Stop the Background Intelligent Transfer Service (BITS) service
- Stop the Windows Update (WUAUSERV) service
- Browse to the "Documents and Settings\All Users\Application Data\Microsoft\Network\Downloader" folder and delete both files in here (qmgr0.dat and qmgr1.dat)
- Browse to the "C:\Windows" directory and delete the SoftwareDistribution folder in here
- Start the Windows Update (WUAUSERV) service again
- Start the Background Intelligent Transfer Service (BITS) service again
- Open the ConfigMgr console and start a "site wide software update synchronization" by right clicking on Software Updates > Software Repository and choose: Run Synchronization
Note: When it's still not working after these steps, have a look at possible changes in the Proxy server configuration. Especially Authentication settings can do the trick here!
Update 28-2-2013: When Microsoft or third party updates are still not download after above change, just try the following: Edit Anonymous Authentication for the IIS website (by right clicking) and change it from a Specific User to Application pool identity.
Thanks to Kapil Dham for the solution on this.