why else would *software pirates* take the time and effort to release updates? It takes manpower, people who have to be made to do the work. I know this is a bit easier given its China but still, pirates don't use resources this way.
First, free tools to install windows updates are available online for legit copies of windows already. Auto-updaters are common on linux distros that have no plans to ever charge anybody for anything. So, it isn't entirely unheard of to offer updates without a revenue stream.
Second, they aren't offering this stuff for free. The posts above talk about $3 professionally-boxed copies of windows. If you want somebody to buy your $3 box of windows instead of somebody else's 50-cent boxless disc then you need to offer a value-add.
The only reason this stuff doesn't happen in the US is that the FBI would bust you if you sold pirated copies of windows. In a regulatory environment where piracy is not prevented, then it makes perfect sense that pirates would compete on quality/features/price/etc just as in any other market.