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Automatic Updates on Windows uses BITS service. Now in Vista you have Vista BITS peer caching. Updates that come from a WSUS server to a Vista client using BITS, this vista cliant can auto share these BITS downloaded updates to other Vista `peers`on the same subnet. This saves bandwidth on the network and saves performance on the WSUS server.

This feature is off by defualt and needs to be enabled through 2 policies± BITS policy, AU policy. Client FW will punch holes automaticly

Source:Bink

Microsoft, MMS, Microsoft Management Summit, Windows Vista, BITS, Cache, WSUS, Server