When Automatic Updates for the Windows Update agent and the Configuration Manager client are enabled on the same machine, both can manage the reboot for the client. This assumes that the Windows Update agent is configured with the default install behavior and schedule.
When both the Configuration Manager client and the Windows Update agent are enabled you will see entries similar to the following in the Windowsupdate.log file:
2010-11-22 13:09:09:916 296 1ffc Agent ** END ** Agent: Finding updates [CallerId = AutomaticUpdates] windows update agent
2010-11-22 13:09:09:916 296 1ffc Agent *************
In the same log:
2010-11-22 14:03:46:064 2720 b84 COMAPI <<-- SUBMITTED -- COMAPI: Search [ClientId = CcmExec]
2010-11-22 14:03:46:064 296 23d4 Agent ** START ** Agent: Finding updates [CallerId = CcmExec] Configuration Manager Client
2010-11-22 14:03:46:064 296 23d4 Agent *********
In this situation, if for example the Configuration Manager client installs an update that requires a reboot and it was suppressed, the update installation creates a registry setting in HKEY_LOCAL_MACHINE\System\Current Control Set\Control\Session Manager\FileRenameOperations with the name of the file that needs to be replaced on the following reboot. The Windows Update agent uses that registry key to define the OS status that will trigger the agent to be in a reboot pending condition.
In a case like this, if the Configuration Manager client is set to reboot the machine after a few days but the Windows Update agent is scheduled to install updates every day at 3:00am, the condition that is applied first after installing the update will be the behavior the OS will have.
The Configuration Manager client installs updates by Windows Update agent API but if machine has the Windows update agent enabled the agent itself will follow its own configuration settings.
Also note that if you sysprep a client machine to use as your base image, and Automatic Updates are enabled when the image is taken, all clients based on that image will retain the Windows Update configuration in the following location:
HKEY_LOCAL_MACHINE\Software\Microsoft\Windows\CurrentVersion\Windows Update\Auto Update\
The relevant values here are scheduleinstallday and scheduleinstalltime.