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I am running UpdateInstaller version 8.9 on a Windows 7 SP 1 64-bit system in a VMware Workstation virtual machine. The wsusoffline\client folder is on a USB flash drive connected to the VM.

Things seem to work fine until it gets to "Listing update files..." in the command prompt window. Then it seems to slow way down and almost hang. CPU usage in the VM drops down to the 2-4% range; so it doesn't seem to be doing anything. Eventually after about 20 - 25 minutes, updates start being installed.

I've tried: changing the VM memory setting to fit all into reserved host memory, creating the virtual hard disk as a single file, turning off Windows Update checking for updates, and turning off Windows Defender real-time scanning.

Any idea why this takes so long? And what can I do to fix the problem?

What Virtual software? In the case of VirtualBox, did you install the PUEL extension? Without that extension you are limited to USB 1.1 speeds.

I'm using VMware Workstation for vitualization, not VirtualBox. The VMware Tools package was installed in the virtual machine.

I'm currently trying to update a Windows 8.1 under VMWare using default Microsoft Update. The delay (30 minutes) is present. So it seems to be a VMWare issue, not a WSUSOU one.

Which AV-program is installed? (host & guest)
RAM size of guest?
Fresh installed guest?

What happens, if you copy the wsusou client-folder into the VM. As far as I know, VirtualBox is the only VM software, which uses direct hardware access to usb devices. So this might cause the delay...

Which AV-program is installed? (host & guest)
RAM size of guest?
Fresh installed guest?

In my case, I did use the standard Windows Update applet to search for updates. It took far more than 30 minutes to finally display anything. I'll answer the questionnaire nonetheless:

-Only the default Windows 8.1 Defender. I didn't bother installing third-party AV.
-4GiB for the guest and two processors.
-Yes, freshly installed and squeaky-clean.

The delay only occurred the first time searching. After that it was fast again.

If wsusou says "Listing update files...", the search using wsusscn2.cab is completed...

To answer the questions about the original situation:
AV in host: Microsoft Security Essentials
AV in guest: only the default Windows Defender
RAM size of guest: 1 GB (this was the recommended size in VMware Workstation for a Windows 7 guest)
Yes, it was a fresh install of Windows 7 SP 1

I copied the wsusoffline\client folder to the C: drive in the VM, and ran UpdateInstaller from there. When it got to Listing update files ..., there was no delay. In less than 15 seconds, it started installing the Windows updates.

So I guess the problem has to do with accessing a host USB flash drive from the VM. Thanks for the suggestion.

(I'll pursue that problem separately, unless someone has any ideas on how to fix that?)