I just turned off automatic updates. Given Microsoft’s history of screwing things up the first few tries there is no way I would want this done automatically.
I have Vista, automatic updates and so far no problems since last August.
I have my automatic updates set to notify. That way I can choose and control what is downloaded to the machine. More than once I have deleted the selection to download IE7. I just don’t want it since I use Firefox for most everything (some videos won’t load under Firefox, I use IE View to access them).