Boomer Sooner, Joseph!! Good to see you on the blogs!
Thanks to dhunt for the comment, too!
Chris, the way I handle updates (and I want to reiterate that this just works for me - YMMV, of course) is that I build what I call a "base OS" image in Virtual Server (and recently, I've been using Hyper-V - just upgraded to RC1 and am very impressed with that). Anyway, I'll build out, say, a 32-bit Windows Server 2003 SP2 machine from an ISO image built with the SP2 bits "slipstreamed" into the main W2K3 bits. Then, I upgrade that base build using Microsoft Update, add things like "support tools" and PowerShell 1.0 that I want on every server, sysprep the image, make it read only, and then use that as a "parent" image for a differencing virtual disk for all other servers. You could also get WSUS and use that to keep your various networks up to date, if you need.
Make sense? If not, feel free to contact me offline - rgillies@microsoft.com - I can get a bit more detailed.