Rather than using symbolic links, move the folder and change the registry keys as explained here : https://stackoverflow.com/questions/5542100/changing-program-files-default-location-in-windows-7
On a side note, I wonder why some programs have issues with symbolic links. It is extremely rare but it happens (Windows update in your case and the other one I can think of is the Bitcoin client)
Check the last post of that thread if you have a 64 bit OS - you have one more registry key to change.