The exact problem is described here:
http://answers.microsoft.com/en-us/windows/forum/windows_7-update/windows-update-agent-767600320-destroys-windows/c870d7f0-9685-4847-b623-e11239ba80ea?auth=1
Your software was recommended by the last guy on that thread...

Some suggestions:
You should reallly add a notification or something that the page file size should be set to automatic control or something like 8-16 GB size in case its not...
I have 2GB of RAM and I always use an old "pro technique" of setting my page file to 1,5x the ram (3000MB in this case) when I install windows.
I got to something like update 130 of 138 when Windows started complaining about "Not enough storage is available to complete this operation." Error 14.
Looking at task manager I saw the RAM was completely filled up by trustedinstaller. Then I found posts about it here on this board.
I rebooted and every update was rolled back by windows on next boot! Trying to update again and I got stuck in the "listing all ids, this may take a while phase" for 1,5 hours (it went in 25mins the first time). I read on this board its actually done by the Windows update itself so it got stuck in the neverending search probably -> reinstalled win 7.
This was a huge waste of time.. (:
