re: Server 2008 update goes bad...

We apply updates to all 200+ of our Windows Servers monthly and have never had a major problem. Most are 2008R2 but there's still plenty of 2008 servers out there and even some 2003 servers that haven't been upgraded yet. On a rare occasion you might have to back out a patch because the application got wonky. Some of the production servers have updates installed manually after the updates are tested in the test environments.

Unfortunately, many custom applications are risky/costly to have migrated to brand new servers so if they were built on a 32-bit 2000 or 2003 server then 2008 is the end of the line in terms of in-place upgrades. Many organizations will ride that out as long as they have to, depending on the application. Server 2003 isn't end of life until next year, I believe.

Most organizations set up a WSUS server to approve updates and use group policy to point servers at it. This also helps with not saturating your internet connection. Bigger shops use SCCM to push updates out.

Wal-Mart has the oldest servers I've ever heard of at a big company. They have a bunch of servers that are 10 years old. I'm pretty sure that they have to catch on fire before approval is given to replace a server/host. Virtual environment runs 5,000 servers on 8 year old equipment and is at near 100% RAM utilization.