Defender wont update (error code 80004002) - cant turn off win upd

Brand new Toshiba laptop with vista home premium preinstalled.

Windows defender update fails with 'the program can't install definition
updates error found code:0x800040002'

Windows update fails with 'windows could not search for new updates error
found code:0x800040002'

Suggestions to turn off windows updates and delete
/windows/softwaredistribution folder cant be done because I can't even off
windows update!

Each time I change the windows update settings they revert immediately back
to 'install updates automatically'

This is an OEM install and Toshiba can't help. I hope someone here can help
yet another vista user who wishes he'd stuck with xp.

You need to Stop the Automatic Updates service, not change the Automatic
Update settings. There is a difference, as you've witnessed.
Go to Start > Run > type in

services.msc
Click OK

Then press Enter

yeah should have mentioned I've stopped updates via services.msc and then
deleted the software distribution folder. It rebuilds the folder and then the
problem is right back again.

Which antivirus/security suite is installed ? What may be occurring is
data corruption in the SoftwareDistribution folder or, the system
files/transaction logs needed to update are not correctly
installed/damaged/corrupted due to scanning them with the installed AV:

Virus scanning recommendations for computers that are running Windows
Server 2003, Windows 2000, or Windows XP
http://support.microsoft.com/kb/822158

The above applies to Vista, also.
Please check the installed version of the Windows Update Agent by
showing hidden files, folders, and system files -

And then, using Windows Explorer, navigate to the WINDOWS\system32
subfolder. Locate wuaueng.dll, right click it, choose Properties
Then click the Version tab
It should be at V. 7.0.6000.374
Please provide the version number of wuaueng.dll

I've reinstalled vista to resolve this. As I have reinstalled twice in only
30 days of owning vista I am not terribly impressed. Still it's working for
now.

I checked mine and I noticed that mine is not version 7. How do I obtain the
latest version?

Try manually installing updates for windows defender. http://support.microsoft.com/kb/923159/