Danny Sullivan recounts the pain of dealing with Microsoft's automatic update tools. Many people I know use Windows Update to keep their machines "secure". I disable it the moment I install the OS.
Why use Windows Update? Some people think that getting automatic updates - like getting IE6 removed and IE7 installed - will protect them from viruses, hackers, and legions of Microsoft security bugs.
Here's my take: if it ain't broke - don't let Microsoft touch it. Has Microsoft's new stuff ever been tested on the configuration you are running. Not likely. Has Microsoft been known to deliver patches that were buggier or bigger security risks than the old code they replace. ALL THE TIME.
Furthermore, the time you waste unraveling problems and waiting for installs is never paid back.
So call me a luddite, but I've found that open source virus checking, and a good firewall is far more secure than letting Microsoft change the code running on your box.
Upshot: You'll be happier if you disable Windows Update. And if you need to try IE7, do it in VMware - using a virtual machine.