If Configuration Manager 2007 clients fail to obtain software updates from Configuration Manager and they have an Active Directory Group Policy setting configured for software update point based client installation, a likely reason is that the Active Directory Group Policy object is incorrectly configured.
The software updates feature automatically configures a local Group Policy setting for the Configuration Manager 2007 client so that it is configured with the software update point source location and port number. Both the server name and port number are required for the software updates client to find the software update point.
If an Active Directory Group Policy setting is applied to computers for software update point client installation, this overrides the local Group Policy setting. Unless the value of the setting is exactly the same (server name and port), the Configuration Manager 2007 software updates feature will fail on the client.
The following entries appear in the software updates log file WUAHandler.log:
[Group policy settings were overwritten by a higher authority (Domain Controller) to: Server http://server and Policy ENABLED]LOG
The software update point for client installation and software updates must be the same server, and it must be specified in the Active Directory Group Policy setting with the correct name format and with the port information (for example, http://server1.contoso.com:80 if the site system server is not configured to use a fully qualified domain name and is using the default Web site).
For more information, see Microsoft web site help How to Install Configuration Manager Clients Using Software Update Point Based Installation.