Software Update control panel reports "Software Update is not able to run" if certain extensions have been disabled.
Solution
2. Choose As Items from the View menu. The Extensions Manager control panel now lists extensions alphabetically.
3. Make sure that the following extensions appear in the list, and are enabled (the checkbox has an X in it).
5. (Only if the issue persists) open the Extensions Manager control panel, select "Mac OS 9.x All" from the Selected Set pop-up menu, and restart the computer.