Thanks joe_intel and other posters. After replacing a hard drive in my laptop, Windows Update would not work and IE would not download files. Another symptom was that when attempting to download an executable file, IE would display a SAVE button not the normal RUN button. I could find nothing on my laptop that indicated Rapid Storage Technology was in use. Posts on Microsoft's website cited possible conflicts between Windows Update and Rapid Storage Technology (http://social.technet.microsoft.com/Forums/windows/en-US/ee85d867-ce2f-412f-8c03-f43ab92132cc/windows-update-cannot-currently-check-for-updates-because-the-service-is-not-running-window-7-help?forum=w7itproinstall).
The solution was to uninstall the entry under IDE ATA/ATAPI Controllers. Though several restarts were required, Windows automatically found and installed new controllers.