Looking at that i'd say it should be ok, you got the correct IE version and all.
Asfor the windowsupdates you need to have genuine windows as it needs to be validated to get updates manually (if not genuine you can still get them by enabling automatic updates i believe: controlpanel > system > automatic updates tab).
Did getting another emailaddy/.NET passport work?
There's another program that can help you out solving windowsproblems, it's called
BigFix. Their homepage seems to be offline atm, but you can read about it and download it
here.
This program recently helped me fix updating problems with an old comp working on Win ME wich hadn't been updated for years (it wouldn't update anymore).
Edit: thank you
and you're welcome
/ 
