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The initial focus of Windows Update was on free add-ons and new technologies for Windows; security fixes for Outlook Express, Internet Explorer and other applications appeared later, as did access to beta versions of upcoming Microsoft software, most notably Internet Explorer 5.
Fixes to Windows 98 to resolve the Year 2000 problem were distributed using Windows Update in December 1998.
The first version of the Windows Update web site (usually referred to as "v3") did not require any personally-identifiable information to be sent to Microsoft.
In order for the v3 Active X control to determine what updates were needed, the entire list of available software on Windows Update was downloaded to the user's computer when they visited the Windows Update web site.
Windows Update v4, released in conjunction with Windows XP in 2001, changed this by having the Active X control submit a list of the hardware components to Microsoft's servers, which then returns a list of only those device drivers available for that machine.
It also narrowed down the list of available updates for the operating system and related components by sending details of what operating system version, service pack, and locale are installed.
While details have changed from version to version, it has always scanned the computer to find what operating system components and software are installed, and compared the versions of those components with the latest available versions.
The Active X component then executes the downloaded installation files in their silent/unattended mode to install or update those components, and to report the success or failure of those installations back to Microsoft's servers.
Arie Slob, writing for the newsletter in March 2003, noted that the size of the update list had exceeded 400KB, which caused delays of more than a minute for dial-up users.Shortly after the release of Windows 98, Microsoft released a Critical Update Notification Tool (later called Critical Update Notification Utility) through Windows Update, which installed a background tool on the user's computer that checked the Windows Update web site on a regular schedule for new updates that have been marked as "Critical".