As always, its best state what operating system you are running: Windows XP, Vista or Win 7 BETA (while Win 7 is not supported, it is good to get that feedback for test, feel free to share, please!)
1. Post any event logs that are specific to the error you are experiencing. (refer to troubleshooting 101 sticky post on how to review your logs.)
2. Provide the details of your country, language, ISP, router, and your internet connection type (DSL, Cable, FioS)
3. Delineate your steps to reproduce the error:
1. launch steam, checks for update, update is found but when it tries to apply the update, this error is displayed.
2. launch steam, checks for update, update not needed, attempt to connect to LIVE and I get this error, 'ERROR MESSAGE GOES HERE>
Thanks for your help on this request.