Benifits of Windows Update

Hi,
To be honest with you, really dont know what you are trying achieve with 2k3 server since 2k8 server is running on the market, if you are planning to implement 2k3 then i would suggest you to go for 2k8 server.
I hope you aware of server functionalities, if you are trying to use for your personnel lab purpose, then download the doc from microsoft and read it properly and try to implement.
The features are in 2k3 has lot and lot I.e domain,active directory,gpo,file systems, etc etc, Impact - cant say anything, its depends on which phisical hardware you are using and how you are maintaining it.

I'm not sure I understand the question - if you mean what are the benefits of a domain then they include:
Centralised Admin
Single user account and single sign on
Managed Security
Highly scalable - you can add as many users/computers as you want
Desktop Management with group policies

to name but a few.

My advice / recommendation to you:
I would install Microsoft Baseline Security Analyzer on your Server or on another client and scan for missing security updates. I'm only installing security updates and necessary updates i need!

Link to MBSA 2.2

Actually Server 2003 is not very up to date any longer.  If your hardware will support it, I suggest going to Server 2011.

Can we have some author feedback please - lots of people are trying to interpret what your question and have responded to their different interpretations

Please can you clarify what you are asking.

My question was simple, I have some Server which is running Windows Server 2003 & last two yaers , no security patches was updated as those Server was handle by customer only. Now they have given to us as a outsource. I have to to convience to customer to impletement scheule path management, that the purpose I was asking some points on befites & disadvantage not asking Windows 2003/ 2008 features.

I got some points from awawada, still waing for drawback if we will not do any path management.

Note : Even though after 2 years , customer was not facing any issue on the server except some hardware failure.

As a best pracktice I want to start patch management which required downtime as well for that I need vaild reason on that.

Please let me know if still any doubt is there.

Some of the main points have been addressed already so excuse me If i repeat some of them. It is important to keep windows up-to-date to:-

Apply 'critical updates ' which MS define as addressing serious vulnerabilities and flaws which could affect the stability or security of your system.

Optional updates may correct minor issues, add features and update windows drivers.

As for down time, unless you are talking about really new patches, there sholdn't be a lot of down time, other than the time required to restart the server after installing the various updates. The server can still be utilized whle the updates are being installed.
   I would suggest a testing process, giving MS past record of creating patches and updates that can cause problems with various software. Unless something is same day critical, I usueally wait a few days after an update comes out before implementing it, this allows for problems to pop up and others to discover them before I create havock on my own networks.

I suspected more information on that.