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After WGA has been installed, it can prevent users of computers with unlicensed copies of Windows from downloading optional OS updates or receiving special offers from the company.
I have never experienced an auto-update that required the user to go throught the WGA process.
Add-on tools (like Windows Defender for XP) - yes, updates, no.
Even if that is the case, WSUS enables you to pre-accept any EULAs on behalf of your users, so there should never be any interaction required by the users to install updates.
David Lazar: We recognize our position as trend setters in the industry. The IDC's annual piracy study estimates 29 billion dollars of worldwide losses due to piracy. I think it is very clear that customers did not want copy protection and so we think that the approach that we have with activation and Genuine Windows validation is quite appropriate.
Something like 1 in 3 users worldwide is using some pirated software or counterfeit software. Obviously we can try to reduce the incidents of counterfeit software, but the real challenge for Microsoft having tried a bunch of what we call sticks in the past, now we want to improve the experience of customers to get them more excited about genuine Windows.
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It's really a balance between having some form of enforcement, but really focusing on making a more interesting, more exciting and more desirable Windows experience for those customers using genuine Windows.