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Windows Server Update Services 2.0 is comprised of a package repository update from Microsoft, an instance of MSDE, a service that downloads updates from an upper server and IIS virtual site. Like many other new products from Microsoft, WSUS administration is done through a web interface that allows administrators to approve or decline updates and get extensive reports on each computer that need updates. System administrators can also configure WSUS automatically approve certain kinds of updates (critical updates, security updates, service packs, drivers). You can also approve updates only for "screening", allowing the administrator to know which computers need certain update without installing.
Administrators can use WSUS with group policies in Active Directory for configuration of Automatic Updates client, ensuring that end users can not disable or prevent updating corporate policies. WSUS, however, does not require Active Directory.
[Edit] Version History

March 22, 2005 - 2.0 Release Candidate
June 6, 2005 - Release 2.0 (build 2340)
May 31, 2006 - 2.0 Service Pack 1 (adds support for Windows Vista, additional languages, allows the use of Microsoft SQL Server 2005 as database, and improves the performance of the web interface)
August 14, 2006 - 3.0 beta 2 (MMC-based interface and adding new features.)
June 2007 - 3.0
[Edit] Application Support

Until August 2006, allowed Windows Software Update Services update the following Microsoft operating systems and applications operating systems:
Windows 2000
Windows XP (32-bit IA-64 and x64 Editions)
Windows Vista
Windows Server 2003
Windows Small Business Server 2003
Exchange Server 2000
Exchange Server 2003
SQL Server
SQL Server 2005
Office XP
Office 2003
Microsoft ISA Server 2004
Data Protection Manager 2006
Windows Live Mail Desktop
Windows Live Toolbar
Forefront Client Utility
This list is not complete, besides, "Max" appears in the interface as a nproducto that WSUS supports. However, Microsoft announced that it is a mistake, and that no updates are offered to "Max". Microsoft has said that WSUS was designed to be able to provide upgrades for non-Microsoft, this has not been implemented yet.