Caution
Incorrectly editing the registry may severely damage your system. Before making changes to the registry, you should back up any valued data on your computer. Use ERUNT

Navigate to:
HKLM\SOFTWARE\Policies\Microsoft\Windows\WindowsUpdate\AU

Add a new DWORD value NoAutoRebootWithLoggedOnUsers with the decimal value 1

Why?
For some updates, Windows asks the user to reboot the computer to finish the installation of the update. When there is still a user logged on, a reboot is not always desired. The automatic rebooting of Windows can be disabled by a change in the registry, in which case the update will be installed at the next boot.

nice tip Jay.... Thanks

This is very handy for when i need my system to run all night.

Many times I've got up in the morning and found it sat at the welcome screen and no work done because windows update decided to restart it.

I found the issue quite annoying, but since my computer cannot update until I find time to reinstall it, I guess I will be doing this tweak later.

Did it work?

I haven't applied it yet, the misses has turned the computer of at home so i cannot remote to it from work.

Time to look at Wake on Lan i thinks....

Will post back once I've had chance to apply it.

Excellent tip. Just saw that the other day and applied it and it works great. I just now got to post and tell you this is excellent and it works good.