I administr a school "for pleasure" and we are always discussing when we should update software. For example today Office 2007 SP2 came out and I was woundering how long I should wait before updating all the pcs. Since there are a few ~130 pcs and we have an automated install client having to fix bugs in the end is a lot harder so how long would you think should I wait before updating?
Generally speaking there are two kinds of updates:
For administering machines like you do, deevus's suggestion of trying it out on one machine is a good cautious approach.
I would install on one machine for testing for a week or so. If there are no issues you could then roll out the updates gradually.
For security updates I tend to wait a week. That's usually long enough for the "early adopters" to find any major bugs. I don't hold to do this if I know there's an active exploit in the wild. In those cases, I may wait 24 hours and then go. For non-security updates, I typically want to give it a bit more time. Maybe a month or two.
In your case, it is probably safe to pick a handful of test systems. If you're using WSUS, you can create a different group and approve the patches/updates earlier than for the other systems. Make sure you pick users who are going to actually put the system through its paces and who can provide good feedback as to what they did and what they saw if a problem is found. Once you're sure you've worked out the bugs, then schedule the mass deployment.
If you're talking about Microsoft updates, I'd tend to install these immediately. If you've got an MSDN or Technet subscription you'll be aware that all service packs go through a lengthy beta and RC cycle so they're pretty stable.
Microsoft also tend to make updates publicly available for download (for those who haven't had a chance to test the pre-release versions) prior to pushing anything out over Windows Update.
Whatever it is you're talking about, the main thing is to install and test before deploying to ensure that it doesn't break any of your other applications (especially internal custom applications). That's just common sense, once you're certain of compatibility then there's no real reason to hold off on updating.
In the example you've given of Office 2007 SP2, it's been well tested prior to public release. Waiting another week won't make any difference, if you're going to have problems you'll have problems. Thats why you want to test first :)
A typical month would follow these steps: Microsoft releases patches on the second Tuesday, the client approves the patch deployment within a couple of days, approve and roll the patches a few days later (pilot workstations only), approve and roll the patches a few days after that (remaining workstations), approve and install patches over the following weekend for servers. Set the mandatory install date for something prior to the next "Patch Tuesday". All of this changes depending on the critical nature of the patches being released and how loud the client is screeching. :)