I also got Windows Update "working" again by simply waiting a bit. I required over 1.3 gb of updates, and the progress showed 0% and 0 kb downloaded for 3 minutes or so. Then suddenly it jumped to 62%, I waited some more and I was able to install the updates. Windows 7 x64 here.
Another tip is to keep your ears peeled and see if you start hearing the hard disk operate as you start the download process (if you have an old fashioned hdd).
I would love it if these types of progress bars also would show the amount of overall internet traffic that is received by the system. Especially if the system somehow would be able to show how much data was being downloaded in the moments before the user started the Windows update download process.