Lots of people are having this problem! I had it myself but this is what worked for me:
1. Open the control panel
2. Open Add/Remove programs (called "Programs and Features" in Windows 7)
3. Navigate to "Apple Software Update" in the list and click on it
4. Click on "Change" then select "Repair" (or just select the repair option in Windows 7)
Once you repair this, try running iTunes and the update again.