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