Let me share the solution that worked for me.
Like many, I've spent hours searching forums and websites for a solution to this problem.
OS is Windows 7
Player is a Lite-On Blu-ray writer
Playback Software is PowerDVD 10 Ultra
DVDs played normally but each time I tried to play a Blu-ray disc, I got the same tiresome error message
I updated all the drivers... tried all the suggested remedies without success.
Even tried a different playback program, ArcSoft TotalMedia Theatre.
I still got the same looping update message
Then I read somewhere it might have to do with the Blu-ray's AACS Copy Protection
So I downloaded and installed a trial program that disables this copy protection, AnyDVD HD
It did the trick!
Everything works normally ever since.
Hope this helps someone,
panabukk