I am going to have to disagree with you RickyVDB. Although I myself do not use fully automatic updates and instead just take the time to check myself I would never recommend this to someone that doesn't know what they are doing, ever. You say that the average user should just use Firefox and good protection? First off, just not using Internet Explorer does not remove it from the system nor does it prevent many other components of the Operating System from using it as Internet Explorer is so deeply engrained into Windows and other products. Therefore, Internet Explorer should always be kept up to date, whether it is your primary browser or not. Also, how would you define good protection? Doesn't good protection start with having all the latest security updates? All the anti-virus/firewall protection in the world cannot help you if there is a 'way into' the machine that bypasses all of it.
I also would have to disagree with not installing the latest versions of the optional software, again for reasons of security. It is the same situation as with IE; Windows Media Player and the .NET Framework may not be directly used by the user but there are parts of the operating system and other applications that will use them so keeping them up to date is important because the latest version will have all the latest security updates and will also be the version supported by Microsoft.
What works for you is just fine, but the real topic of this thread is that Dell Tech Support is telling ALL users that Windows Update needs to be disabled completely. Ideally, it would be nice if everyone put in the time and effort to look into each and every update and make sure it is something that needs/should be installed, but can anyone really believe that the average user is going to do this? The answer should be no because the average user tends to just not care enough or doesn't really know what they are doing with regards to updating the Operating System and that is why Dell telling customers to disable Windows Update is a bad thing.