You acknowledge and agree that Microsoft may automatically check the version of the Product and/or its components that you are utilizing

To me, that says that they are authorized to check what version I have installed. Yes, it says what I am "using," but it can reasonably be argued that if I have a default WinXP installation and connect to the internet, I am "using" all the default components of WinXP.

If I have "auto_update324.dll" installed, that is the version of auto update that I am "using." The fact that I have selected the option of not actually downloading anything with the feature doesn't mean that I'm not "using" that version. BTW does the text next to the checkbox say "Don't download updates" with auto update, or does it say "Don't look for componenets that need to be updated"? These are two legally distinct things.

Finally, I still think the larger point of this article was simply to point out to people the latest in a trend of license terms that, if valid, are apparently incompatible with many organizations' other contractual obligations. If your company's standard contract describes a secure environment on which you will host customer data, a EULA that explicitly allows Microsoft to update your software may contradict that description.