This problem has been on a lot of newsgroups and forums available on the Internet and it has something to do with WSUS Administration Console screwing up.
Apparently, a category for a product was renamed cuasing it to introduce restricted characters in the form of double-quotes in the backend database (the product category happened to be codenamed Nitrogen).

This has caused the application to throw an error, thus, making the WSUS Administration Console inaccessible (see this Microsoft WSUS blog entry for more details). A workaround has been provided by the WSUS Team that deals with this problem but has something to do with updating or modifying some records in the SUSDB database. Here’s my version of one of those SQL scripts which you need to run from your command-line
osql.exe –S\WSUS –E –Q”USE SUSDB; BEGIN TRAN; EXEC dbo.spStartCatalogSync; COMMIT TRAN”
Make sure to replace with your server hostname before running this script. Another version of the workaround can be found from the SANS Internet Storm Center website
2> GO
1> Update tbPrecomputedCategoryLocalizedProperty Set Title = Replace(Title, ‘”‘, ”) Where Title like ‘%”%’
2> GO
1> Update tbPreComputedLocalizedProperty Set Title = Replace(Title, ‘”‘, ”) Where Title like ‘%”%’
One thing to highlight here for those who are not comfortable with Transact-SQL is that we are trying to update the Title field of the tbPrecomputedCategoryLocalizedProperty and tbPrecomputedLocalizedProperty tables and replacing the double-quotes with single-quotes using the Replace function.
What I don’t understand is why Microsoft tried push the update for public consumption if it’s still in Beta (try reading the description of the product to find out) although they did promise that it was pulled out of their servers. I’m still keeping my fingers crossed