Same problem for me. W7SP1 Pro x64 (US English). Windows Defender will not start ("stub received bad data"), Windows Update no longer works (error code 0x800706F7), Internet Explorer 11 will not install (log file says "failed to install local package"), Microsoft Security Essentials will not complete installation.
Removed KB3004394 and all seems to be back to normal.
A colleague's PC running W7SP1 Pro x86 (Brazilian Portuguese) will not install Net Framework 4.5.2 from Windows Update after KB3004394, so maybe the same problem occurs with the 32-bit version of Windows 7. But I do not have access to his computer to check this.
I haven't had any problems on 2 machines running Windows 8.1 Pro x86.
Re the Windows 8.1 patches: Windows Update at first offered to install an update to Microsoft Silverlight, but now it has disappeared (I did not have WU configured to automatically install updates, so the Silverlight update has not been installed). I've also read a comment on na Austrian site about this update causing problems navigating many sites that use Silverlight.
So it seems that Microsoft has released two buggy patches...