I am experiencing the same issue. I've installed WAU on a new computer I built myself over the weekend. Currently, the computer has a 64-bit Windows Vista installed, WoW, Vent, Adobe Acrobat, Firefox, and Flash, Kaspersky Internet Security 7, WAU and nothing else.
I open WAU, select one addon to be updated (I copied my Interface folder from my old computer) and choose update marked addon. It begins to run and then says "Error During Update". I tried adjusting the World of Warcraft folder to allow everyone full control over the folder. There are not other users for this PC (except my mother if she's vising, and she knows more about computers than I do), so this is a security feature in Vista I'm not fond of. Anyone have other suggestions for how to resolve this "Error during update" issue?