The Real Dilemma
It's fine and dandy for knowledgeable people (or at least those who think they are) to declare that it's better to not install Microsoft upgrades, or at least wait a few months until they've proved themselves.
The challenge is what do you do with Uncle Joe, the average computer user that doesn't want to know the inner workings of his PC, but still wants to be safe? My experience has been that it's better to leave auto-update turned on, and know that regardless of what other problems might emerge, at least any security updates will get applied as quickly as possible.
I guess Uncle Joe's advantage is that he likely has a bog standard PC, unchanged from the day that he bought it, so in most cases updates will just work without too much trouble.