I've had two Windows 2000 Professional machines in as many days that are unable to download updates. The usual Dial-a-fix Windows Update fix routines changed little about the situation. I found out that BITS couldn't start because SENS couldn't start because EventSystem couldn't start. On the second machine, EventSystem was starting, but then SENS was the final failure point. (NetMan and several other services that usually run under SvcHost were also failing with the Event 700x error listed below.)
The event log gets flooded with Event 7000 (SENS), Event 7001 (BITS), Event 4097 (EventSystem), and DCOM event 10005.
The fix is to change the "netsvcs" REG_MULTI_SZ in HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Svchost. You can save the following block of text as a .reg file and double-click it to import it (it's for Windows 2000 only). Then restart the computer. All of the services that failed before should now work fine, and Windows Update should work again (and/or Dial-a-fix will finally be able to help).
Windows Registry Editor Version 5.00
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Svchost]
"netsvcs"=hex(7):45,00,76,00,65,00,6e,00,74,00,53,00,79,00,73,00,74,00,65,00,\
6d,00,00,00,49,00,61,00,73,00,00,00,49,00,70,00,72,00,69,00,70,00,00,00,49,\
00,72,00,6d,00,6f,00,6e,00,00,00,4e,00,65,00,74,00,6d,00,61,00,6e,00,00,00,\
4e,00,77,00,73,00,61,00,70,00,61,00,67,00,65,00,6e,00,74,00,00,00,52,00,61,\
00,73,00,61,00,75,00,74,00,6f,00,00,00,52,00,61,00,73,00,6d,00,61,00,6e,00,\
00,00,52,00,65,00,6d,00,6f,00,74,00,65,00,61,00,63,00,63,00,65,00,73,00,73,\
00,00,00,53,00,45,00,4e,00,53,00,00,00,53,00,68,00,61,00,72,00,65,00,64,00,\
61,00,63,00,63,00,65,00,73,00,73,00,00,00,54,00,61,00,70,00,69,00,73,00,72,\
00,76,00,00,00,4e,00,74,00,6d,00,73,00,73,00,76,00,63,00,00,00,57,00,5a,00,\
43,00,53,00,56,00,43,00,00,00,00,00
"rpcss"=hex(7):52,00,70,00,63,00,53,00,73,00,00,00,00,00
"wugroup"=hex(7):77,00,75,00,61,00,75,00,73,00,65,00,72,00,76,00,00,00,00,00
"BITSgroup"=hex(7):42,00,49,00,54,00,53,00,00,00,00,00
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Svchost\BITSGroup]
"DefaultRpcStackSize"=dword:00000008
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Svchost\netsvcs]
"CoInitializeSecurityParam"=dword:00000001
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Svchost\wugroup]
"CoInitializeSecurityParam"=dword:00000001