Search for "windows update" and "blue screen" or "boot loop" or crashing for numerous examples.
If microsoft would actually spend money and time (real time and serious testing, not a few months of continuous integration testing) rather that using that "good enough to release" philosophy, maybe there would be fewer open hanger doors for malware to fly through.
Otherwise, I don't recall having a Windows Update problem recently -- certainly not this century -- and I haven't seen any malware either.
I'd be willing to bet that the malware problem will be significantly smaller with Microsoft doing the updating than it is at the moment, even though the majority of malware problems on Windows are down to human ignorance.
(I know I can run Windows 7 with no AV at all, and I'm certainly not the only one. I don't recommend it, but I have done it.)
I don't let MS do automatic anything on my windows box. I only use that box for a couple of apps, but when I need them, I really need them and can't afford to be blindsided by a box that won't boot.
I pick and choose the updates I apply and only then after they've been out in the wild for a month or so. I'm not going to let microsoft do any alpha/beta QA testing... errr... I meant "automatic updating," on my production box.
Refusing to install essential updates has cost some companies millions of dollars, conficker being just one example. I think it's better to install updates than not, and that someone who did the numbers could probably prove it.
Otherwise, real geeks keep backups that are tested as working. This is what separates the men from the boys.