If you are truly at the Windows Update site, then you DID NOT receive "spyware" from their update. Occasionally updates cause issues with your computer but they aren't spyware.....unless of course, you consider their "Windows Genuine Advantage Notification" update spyware but that's another issue..
Basically, I install only the "Critical/High Priority Updates" that are listed after doing a "Custom" scan at the Windows Update site but I do install almost ALL of them.. (If you also have Microsoft Office installed, you can perform a similar update scan at the "Office Updates" site and it will update Office.) I DO NOT install the "Optional Software" and "Hardware" updates unless researching each update. (I NEVER install the 'Hardware" updates but instead visit the manufacturer's website should I need an updated driver.) Although they are not "spyware" as you have indicated, they can cause problems with your computer in some situations..
Unlike many users, I have some test machines where I can update both XP and Windows 2000 machines and see if there will be any problems..
For most users, there is normally a thread posted in the "Virus & Security Alerts" forum on the day of each "Patch Tuesday" which describes each of the updates. If there are problems with any of the updates, the various forum members tend to post back with those issues.. Waiting a day before updating and reading the information there can be a great help.
On the second Tuesday of every month, click on the link below and watch for the updates thread:
http://forums.cnet.com/5204-6132_102-0.html?forumID=32&start=0&tag=cnr
Hope this helps.
Grif
I know that everyone says to keep up-to-date on downloading any updates that Microsoft puts out. Many people choose the automatic update. I don't.
I'm hesitant about installing Microsoft updates. I did that on my last PC and an update fried my PC with spyware and I had to buy a new PC. Microsoft tried for over 5 hours to help me, but nothing worked.
I've tried installing updates individually and make sure I read about the update thoroughly before I installed it. However, this gets time consuming considering the number of updates that Microsoft releases.
Any ideas on a "safe" installation of Microsoft updates.
Thanks,
amelia

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic