I had the exact same issue as above - on going to the Windows Update control panel, and clicking 'change settings' in the left pane, I have only three options: Important Updates, Recommended Updates, and Who Can Install Updates. There's no option to get
updates for other Microsoft products (such as Office 2007, which is installed) or to get detailed notifications when Microsoft software is available.
Windows Update informs me I receive updates for Windows only. Clicking the 'learn more' link takes me to the Windows (XP) update website which, unsurprisingly, finds no updates (once I go there in IE8 running as administrator).
I've got a clean (custom) install of Win 7 64-bit. Like Richard I was using the user account setup when I installed Windows; I tried creating a new admin account like he suggested and switching into that one but I was faced with the same settings page I had
in the first account. Not sure if I missed a step in the process.
Installing Silverlight seemed to work, however (at the end of the installation there was an option to enable Microsoft Update, I checked that and clicked OK). Once I'd done that the last two options (get updates for other Microsoft products, and get detailed
notifications when Microsoft software is available) appeared in the Windows Update settings.