Just for information purposes.
I was getting this error constantly.
I un-installed SCUP and the WSUS hotfix, the error kept on occuring while trying to "enable Publishing to an update server"
The Update server was the locla host but every connection I tired was giving me this error.
I then after numerous attmepts of re-installing, checking firewalls etc found the resolution to be as simple as running scup with elevated privelages (strange seeing that my account is a local admin on the server)
I ran SCUP as an administrator of the server, Selected the "Enable publishing to an update server" and the connection was succesful.
Hope this helps
Joe
Joe Assad