If you encounter the error code 0×8007005 via Windows Update then you have some issues with your system’s registry. I ran into this error code today. I scoured the net and started thinking it had to do with the Senslogn registry key. I was wrong. I searched a little more and finally figured it out. There are a bunch of posts in Google Groups but no actual fix.
Here is the low down. Somehow, some way, your registry permission on the HKEY_CLASSES_ROOT key becomes corrupted and or removed. If you go to regedit, then right click on the HKEY_CLASSES_ROOT key and then go to permissions (this is if you are running Windows XP Home, MCE or Pro). Right away you should see a box like this. However, as with my picture linked here, you will probably only have the name “Everyone” located in there. That is causing your 0×80070005 error. You need to remove the Everyone user. Now one by one, while copying the exact same user names and permissions as the one pictured here, do it step by step. After you’re through, close that out and reboot your machine. You should now be able to use Windows Update. Hope this helps.