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Junkie
Location: North Hollywood
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yeah they ask for that info when you install hardware it doesn't recognise, they just use it for determining if theres hardware out there they need to look at including in the default build etc.
Looking at all your hardware and uploading it, well duh, its looking for device driver updates 
as for determining which browser you are using and creating a special page for it, errr umm...
This is what MS said about it.
Quote:
The Facts: What Information Does Windows Update Really Collect?
REDMOND, Wash., March 24, 2003 --Researchers for the German-based Web site tecChannel claimed recently to have analyzed data collected by the Microsoft Windows Update Web site and found that it provided Microsoft with a list of all software on a user's computer. If that were true, it would be inconsistent with the Windows Update Privacy Statement, which is posted on the site and details all the information collected by Windows Update.
To find out what information Windows Update actually does collect, PressPass spoke with Microsoft's Nick Dallett, the Windows Update program manager for supportability and sustained engineering. Dallett is also responsible for privacy and security issues for the Windows Update Web site.
PressPass: What is Windows Update, exactly?
Dallett: Windows Update was launched to make it easier for people to keep their computers up-to-date by providing a single, easy-to-use Web site for automatically downloading the latest enhancements, patches, and security updates for the Windows operating system. Part of providing updates for Windows is to offer a catalog of the latest device drivers to ensure that hardware devices are compatible with Windows. Drivers are provided to Microsoft by third-party manufacturers, and we do collect information about the devices installed on your machine, and the versions of drivers installed for those devices in order to see whether Windows Update has newer drivers that would be appropriate for your computer. This information is used during the scanning process and is not stored by Microsoft.
When you visit Windows Update, the site scans your computer to see if there are any applicable updates that are not installed on your computer. It then provides you with a list of updates that are appropriate for your machine.
PressPass: What information does the Windows Update site collect?
Dallett: To provide that list of appropriate updates, the Windows Update site must collect a certain amount of configuration information about your computer. The information includes the version numbers for your operating system and for Microsoft Internet Explorer, the version numbers for other software that the site provides updates for, Plug and Play ID numbers for hardware devices, and your region and language settings. Windows Update also collects the Product ID and product key to make sure that you are using a valid, licensed copy of Windows, but we do not keep that information once your Windows Update session is over.
To provide the best service we can, Windows Update also records how many unique computers visit the site, and whether updates are downloaded and installed successfully. To determine unique-user counts, Windows Update stores a randomly generated unique identifier on your computer. That identifier does not contain any personal information and it cannot be traced back to you or your computer. This install-status information, including the unique ID and other non-personally-identifiable information, is the only information Windows Update stores, and it is used only to aggregate statistics and to troubleshoot install errors.
PressPass: Does Windows Update collect information about software other than Windows?
Dallett: As I mentioned before, the site does scan your computer to see what devices are installed, and the versions of the device drivers installed for those devices. Beyond that, Windows Update does not check your computer to see what other software you have.
PressPass: Can any of the information that Windows Update collects be used to identify individual computer users?
Dallett: Windows Update only collects the information that is required to determine what updates your computer can use, whether your version of Windows is legitimately licensed, and to track how many computers visit the site and whether downloads are successful.. Windows Update does not collect names, addresses, e-mail addresses, or any other personal information.
PressPass: According to recent reports, researchers at a German Web site called tecChannel analyzed the data sent to Windows Update when it scans a computer and found that it includes a list of all installed software.
Dallett: The article on the tecChannel site refers to the GetSystemSpec method on our ActiveX control. This method can be used to obtain several different types of information. When the method is called without any parameters, the default behavior is to return all available data, which includes a list of top-level keys in the Software hive of the system registry. However, when the Windows Update Web site or the Automatic Updates client calls this method, the call includes parameters that limit the data that is returned so that it only contains information about the system type, the Windows operating system version and locale, and devices installed on the system. This can be easily verified by checking our site files for instances of this method call. If the tecChannel people used the API without including the parameters that we always send, then they'd see classes of information, such as third-party software, that Windows Update never asks for, and they might assume we are asking for registry data that we never collect.
PressPass: Why does the Windows Update API include the capability to scan for data like third-party software if the Windows Update doesn't want to collect that information?
Dallett: One of the goals of Windows Update design was to provide a means of updating third party software such as device drivers, etc. To do that, we needed to be able to determine if any of the supported software was on the box before we downloaded files to the machine. The specific registry keys mentioned are the quickest and least intrusive way of determining if software for a particular third party was on the box or not.
This information is readily available through publicly documented APIs that are available to any Windows programmer (see http://msdn.microsoft.com/library/de.../registry.asp, for example). I'd also like to reiterate that Windows Update does not take any of this information off the client machine, as this data is specifically excluded from the information the site requests from the control.
PressPass: Not to belabor the point, but to be clear, does Windows Update collect the information that tecChannel claims it does?
Dallett: Absolutely not
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