WSUS 3.0 Client not report to server

IF you have facing the problem like the log shows

2008-03-28 12:10:24:947 1152 274 AU ## START ## AU: Search for updates
2008-03-28 12:10:24:947 1152 274 AU #########
2008-03-28 12:10:24:947 1152 274 AU <<## SUBMITTED ## AU: Search for updates [CallId = {C98707A2-D7AF-4D38-A4D5-BAA0482F53E3}]
2008-03-28 12:10:24:947 1152 864 Agent *************
2008-03-28 12:10:24:947 1152 864 Agent ** START ** Agent: Finding updates [CallerId = AutomaticUpdates]
2008-03-28 12:10:24:947 1152 864 Agent *********
2008-03-28 12:10:24:947 1152 864 Agent * Online = Yes; Ignore download priority = No
2008-03-28 12:10:24:947 1152 864 Agent * Criteria = "IsHidden=0 and IsInstalled=0 and DeploymentAction='Installation' and IsAssigned=1 or IsHidden=0 and IsPresent=1 and DeploymentAction='Uninstallation' and IsAssigned=1 or IsHidden=0 and IsInstalled=1 and DeploymentAction='Installation' and IsAssigned=1 and RebootRequired=1 or IsHidden=0 and IsInstalled=0 and DeploymentAction='Uninstallation' and IsAssigned=1 and RebootRequired=1"
2008-03-28 12:10:24:947 1152 864 Agent * ServiceID = {3DA21691-E39D-4DA6-8A4B-B43877BCB1B7}
2008-03-28 12:10:24:947 1152 864 Misc Validating signature for C:\WINDOWS\SoftwareDistribution\SelfUpdate\Default\wuident.cab:
2008-03-28 12:10:24:963 1152 864 Misc Microsoft signed: Yes
2008-03-28 12:10:24:979 1152 864 Misc Validating signature for C:\WINDOWS\SoftwareDistribution\SelfUpdate\Default\wuident.cab:
2008-03-28 12:10:24:994 1152 864 Misc Microsoft signed: Yes
2008-03-28 12:10:25:010 1152 864 Misc Validating signature for C:\WINDOWS\SoftwareDistribution\SelfUpdate\Default\wsus3setup.cab:
2008-03-28 12:10:25:025 1152 864 Misc Microsoft signed: Yes
2008-03-28 12:10:25:025 1152 864 Setup *********** Setup: Checking whether self-update is required ***********
2008-03-28 12:10:25:025 1152 864 Setup * Inf file: C:\WINDOWS\SoftwareDistribution\SelfUpdate\Default\wsus3setup.inf
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\cdm.dll: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wuapi.dll: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wuapi.dll.mui: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wuauclt.exe: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wuaucpl.cpl: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wuaucpl.cpl.mui: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wuaueng.dll: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wuaueng.dll.mui: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wucltui.dll: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wucltui.dll.mui: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\SoftwareDistribution\Setup\ServiceStartup\wups.dll\7.1.6001.65\wups.dll: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\SoftwareDistribution\Setup\ServiceStartup\wups2.dll\7.1.6001.65\wups2.dll: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup Update NOT required for C:\WINDOWS\system32\wuweb.dll: target version = 7.1.6001.65, required version = 7.1.6001.65
2008-03-28 12:10:25:041 1152 864 Setup * IsUpdateRequired = No
2008-03-28 12:10:26:709 1152 864 PT +++++++++++ PT: Synchronizing server updates +++++++++++
2008-03-28 12:10:26:709 1152 864 PT + ServiceId = {3DA21691-E39D-4DA6-8A4B-B43877BCB1B7}, Server URL = http://sbslche-epo/ClientWebService/client.asmx
2008-03-28 12:10:26:974 1152 864 PT WARNING: Cached cookie has expired or new PID is available
2008-03-28 12:10:26:974 1152 864 PT Initializing simple targeting cookie, clientId = 822799aa-75a6-425a-908f-4556747e5551, target group = , DNS name = sbslche-pc0483.sbslche.com
2008-03-28 12:10:26:974 1152 864 PT Server URL = http://sbslche-epo/SimpleAuthWebService/SimpleAuth.asmx
2008-03-28 12:10:26:974 1152 864 PT WARNING: GetAuthorizationCookie failure, error = 0x80244017, soap client error = 10, soap error code = 0, HTTP status code = 401
2008-03-28 12:10:26:974 1152 864 PT WARNING: Failed to initialize Simple Targeting Cookie: 0x80244017
2008-03-28 12:10:26:974 1152 864 PT WARNING: PopulateAuthCookies failed: 0x80244017
2008-03-28 12:10:26:974 1152 864 PT WARNING: RefreshCookie failed: 0x80244017
2008-03-28 12:10:26:974 1152 864 PT WARNING: RefreshPTState failed: 0x80244017
2008-03-28 12:10:26:974 1152 864 PT WARNING: Sync of Updates: 0x80244017
2008-03-28 12:10:26:974 1152 864 PT WARNING: SyncServerUpdatesInternal failed: 0x80244017
2008-03-28 12:10:26:974 1152 864 Agent * WARNING: Failed to synchronize, error = 0x80244017
2008-03-28 12:10:26:974 1152 864 Agent * WARNING: Exit code = 0x80244017
2008-03-28 12:10:26:974 1152 864 Agent *********
2008-03-28 12:10:26:974 1152 864 Agent ** END ** Agent: Finding updates [CallerId = AutomaticUpdates]
2008-03-28 12:10:26:974 1152 864 Agent *************


Answer:

Just add IUSR_MachineName to users group and restart the IIS.
More help Pls vist: Microsoft