This policy setting allows you to remove links and access to Windows Update.
If you enable this policy setting, users are prevented from connecting to the Windows Update Web site.
Enabling this policy setting blocks user access to the Windows Update Web site at http://windowsupdate.microsoft.com. Also, the policy setting removes the Windows Update hyperlink from the Start menu and from the Tools menu in Internet Explorer.
Windows Update, the online extension of Windows, offers software updates to keep a user's system up-to-date. The Windows Update Product Catalog determines any system files, security fixes, and Microsoft updates that users need and shows the newest versions available for download.
If you disable or do not configure this policy setting, the Windows Update hyperlink is available from the Start menu and from the Tools menu in Internet Explorer.
Also, see the "Hide the "Add programs from Microsoft" option" policy setting.