Is it safe to install Windows Updates on a Boot Camp'ed OS?
For practical purposes, when you boot into your Boot Camp partition you are on a regular PC: All updates pushed thru Windows Update should work as expected. I have used Boot Camp since the beta period all the way to Snow Leopard and I have never experienced a situation like the one you describe. 

I believe that Windows Update will only push updates that are critical (like security updates) and everything else (like driver updates) is listed as optional. I recommend enabling the option that makes Windows Update prompt you whether or not it should install updates when available. That way if you are in doubt, you can always review and make sure any driver updates are not pushed into your system, and things like security updates are. 

It might be a good idea to stick to the drivers provided by Apple. 

I am unsure why you had to manually install the drivers on a USB drive, since they are usually installed automatically from the Mac OS X DVD right after Windows completes its setup. I wonder if there is a particular situation with your system and that the fact you had to install the drivers separately is related to what is causing your hardware to be unreponsive now.