I have just updated all my office's machines running Windows 7 using Windows Update without any problems. I don't think your problem lies with Windows Update. However, the fact that this is happening on all your PC's is very strange and implies something is wrong at your end. Can you describe in more detail exactly what happens during your attempted updating (how long you allow things to run, any error messages you get).
Also, have you tried troubleshooting Windows Update? See link below.