Paul, Im glad you appear to have the same success I had with the workaround.
If you search discussions, youll note that this problem with Direcway and Software Update came about as soon as Tiger was released. Another poster noted temporary success by deleting the entire com.apple.softwareupdate folder. Obviously that meant that something was changing in there, like a new cache file being written, to cause the problem.
I just happened to open the first folder, 00, and the first folder in it, 14, and watched to see what happened when I ran SU. Usually, but not always, a cache file would be written and SU would error the next time it was run. All the cache folders are eventually replaced when SU is run so the problem would reoccur even if folders were trashed. Locking 14 was the low-maintenance temporary long-term solution. I can now wait patiently until the techs figure out whats being written on that cache file to cause the jam. I suspect its not a high priority fix for them but I can breathe normally in the meantime.
I also had problems with Safari and incomplete downloads of graphics on web pages. Ive since switched to Firefox and have had zero problems. BTW, my Direcway 6000 shot craps this afternoon. I love living in the country but I sure miss real broadband.