If you get a screen on your WSUS server that looks like this:
Or when trying to connect you get this error:
The problem is most likely with your WsusPool in IIS 7.x. Open the IIS 7 Manager and go to Application Pools. Then double-click the WsusPool. The .Net framework version should be set to v2.0.50727 (mine was set to unmanaged). Make certain all settings, including .Net Framework version, are set to what you see here:
Click OK then restart IIS 7. Your WSUS console should connect now. I have seen this problem come up after fresh installs. Apparently the installer does not set this setting correctly sometimes.