Got it all working. Installed it onto one of the new servers we are using to stream media - as it needs about 30gb and this sevrer has 1.5tb
Easy install if you are running server 2003 SP2 - even managed to run the management console on my XP desktop so dont have to VNC, or *gasp* walk to the server cab to use it.
So far just rolled out 180 updates to the two admin machines, one being IE7, one has picked up, mine hasnt but did yesterday with my first ever test package, will see what happens tomorrow AM.
Have set up a new GPO called WSUS Settings and applying that to groups in the AD, then sorting into groups in WSUS - you can get the GPO to do that automatically as long as you set up the empty groups first in WSUS then put the name in the GPO, however - I cant be arsed to create a new GPO for each OU in AD - so just gonna do it manually.
Useful links for it:
http://technet.microsoft.com/en-us/wsus/default.aspx - Technets WSUS 3.0 homepage
http://technet2.microsoft.com/windowsserver/en/library/632f98ac-9d45-480b-b801-996b714cebd01033.mspx?mfr=true guide to install it - IE only it seems