You have to be careful when adding software updates to Microsoft Deployment Toolkit. While you can add software updates to the Packages node of your deployment share in Deployment Workbench, this isn't always a good idea. For example, let's say you download all the pre-SP1 updates for Windows 7 using your WSUS server and add each of these updates to the Packages node of your deployment share. Then you try and deploy Windows 7 to target computers and during the Installing Packages phase the deployment fails with the error "Windows could not apply unattend settings during pass [blank]". What may have happened here that one of the updates needs to be installed separately from the others, or perhaps the update doesn't like being installed offline. If this happens, you may need to install Windows 7 as-is and then let the target computers use WSUS to download and install the updates needed.