Obviously, the issue of Windows Updates (along with any other software automated update system) is something quite debated and handled quite differently from tech to tech. However, pure and simple truth throughout the history of advancing computer technology and the generally accepted standard for IT administration is to install available updates FOR YOUR TRUSTED PROGRAMS including Windows. I don't install updates for everything personally, but for Windows I will allow updates.
However, as Sightline pointed out, the best thing to do is to turn off the automatic updates and enable the Notify Me option so you can manually install updates. Wait a week before you install them, though, as if there is a problem with an update it will usually be rectified in that waiting time.
I've not worked with nearly the quantity of computer systems that some of the others have here, but yes I've been burned by bad Windows updates on a few occasions. I've had entire offices unable to start up their computers one morning after they all did a batch of automatic updates which installed an improper update to system drivers for AMD 7xx series chipsets and had to do system restores on the computers to remove the updates and fix the issue. However, at the same time, I've also seen on more than one occasion I've also seen Windows updates which have solved issues and improved stability. There are just so many variables and such a broad range of users, products, and devices out there that Windows updates are bound to cause some issues, but also are doing the job that they are intending to do: fix issues.
In the end, personally I think the idea of turning off all updates completely is just asking for trouble - maybe not right away, but down the road. To me its the equivalent of telling someone, "If your car is running fine right now, then there's no need for you to change the oil."