I think what IE should do (similar to what Firefox, Safari, and Opera do) is when an update is available pop up a box telling the user about it and recommending that they upgrade their browser.  This should happen when the user opens the browser ... not just as a part of the windows update process.  The browser is such an import thing right now that its update process should be available with the browser itself.  Also IE users should be given the opportunity to auto-update their browser separately from the auto-update windows functionality.