Is Windows XP searching updates to install during shutdown? I looked my WindowsUpdate.log and there was entries like; "Install at shutdown: no updates to install" and "WUAutoUpdateAtShutdown failed". Is there anyway to disable that? I have WU automatic updates disabled.

It's indeed a Windows Update feature. At shutdown Windows looks for freshly downloaded Windows Update to install, and will present you with a prompt at shutdown if they're found.

"WUAutoUpdateAtShutdown failed" > error 8024000C generally points to some kind of a network issue.

Not sure why it appears while you have automatic updates disabled though . Maybe it's precisely because you have them disabled...

BTW, go to Start > Run > Services.msc and scroll down to the Automatic Updates Service. Is it in fact disabled?

Yes,it's disabled for sure.

Well, I'm sure it's nothing to worry about. It may just be a default action Windows undertakes at shutdown, whether or not AU is enabled or not.

You could also try posting in the dedicated MS Windows Update newsgroup for some more input:

news://msnews.microsoft.com/microsoft.public.windowsupdate

ive noticed, if it asks me to install updates, i can simply install them at shutdown by going to start>shutdown>shutdown.
this is also where it tells you that theres updates and they will be installed.

Certainly, but if you read CeeCee's original post carefully you'll see that he/she has Automatic Updates DISabled, hence the question.