I couldn't tell you why, but I haven't (yet) observed the described behavior on my XP system. The auto-updater ususally settles down in a matter of minutes.
No. In my case, it's trying to apply the .NET updates that completely murders my system. Apparently MS wants a gigabyte or so of free disk space on C:\ (and nowhere else) or the update will fail miserably. As it happens, my system partition has about 200MB free space, so the update disappears down a rabbit hole and never completes.
I used to think it was because it needed a bunch of temporary disk space, so last night I changed the TMP and TEMP environment variables to point to a volume with tons of free space, rebooted (because, you know, it's Windows), set just one of the several .NET updates running, then went off to see The Hobbit. When I returned some three hours later, the update had hung, the disk was idle, C:\ had zero bytes free, and the system log was corrupted.
Honestly, I don't know why anyone continues to be surprised by Redmond's rank incompetence...