The error you received when trying to install the latest Intel HD Graphics driver is because your system has a customized graphics driver installed by the manufacturer. They usually modify the driver to enable or disable functions of the driver usually related to power options, docking/undocking behavior, etc. You can try to install the generic Intel driver if you follow these steps exactly. However, you will loose any customizations made in the driver by your manufacturer. If you are not satisfied with the generic driver update you can always reinstall the driver customized for your system. I would also recommend setting a restore point before making any changes. Download the zip file version mentioned in this thread and extract to a folder on your desktop and follow these instructions to overwrite the customized driver.
1. Login with administrator privileges
2. Open Control Panel
3. Open Device Manager
4. Click on "Display adapters"
5. Double click "Intel HD Graphics"
6. Click on the "Driver" tab
7. Click on "Update Driver" button
8. Click on "Browse my computer for driver software"
9. Click on "Let me pick from a list of device drivers on my computer"
10. Click on "Have Disk" button
11. Click "Browse"
12. Navigate to the folder that you unzipped the Intel HD Graphics driver to
13. Navigate to the Graphics sub-folder
14. Double click the igdlh64.inf or igdlh.inf file <-- depends on if you have 32 or 64 bit OS
15. Click "OK"
16. Click "Next", Driver should now be installing.
17. If successful, click "Close", Reboot.