I've uninstalled ASUS Live Update. That would certainly get the "recommended update" to go away. Alternatively, Windows Update allows you to configure updates you choose not to install to not be recommended again. Perhaps ASUS Live Update has a similar feature...
I think it is good ASUS Live Update errored out on your BIOS update. Some folks have had their laptops bricked when it attempted the BIOS update using WinFlash. BIOS 202 was recommended to resolve skipped key issues on the G74SX (see
http://rog.asus.com/forum/showthread.php?3076-G74SX-Keyboard-Issues-ATK-1.0.00010-BIOS-202-Available.... If you are not experiencing this, it may be best to skip this update. If you do choose to update your BIOS, you may as well choose the 203 update, as it contains all changes in 202 (and would be recommended by ASUS Live Update after you completed the 202 installation).
If you choose to update your BIOS to the 203 version, I recommend you follow @BrodyBoy's .PDF article (
http://rog.asus.com/forum/attachment.php?attachmentid=6201&d=1329792574) that discusses how to use the EasyFlash utility in your BIOS for the best chance of success. As I'm sure you've read in other threads, if anything goes wrong during a BIOS update, even with this method, there is the potential that your laptop will be rendered unusable.
G74SX-A1 - stock hardware - BIOS 202 - 2nd Monitor VISIO VF551XVT