>>Click the Start menu and type "gpedit.msc" (without quotes) in the search line and press the enter key. This will launch the Local Group Policy Editor.
>>
>>On the left side of Local Group Policy Editor, expand to Computer Configuration > Administrative Templates > Windows Components. Then scroll down and select Windows Update.
>>
>>Double click "No auto-restart with logged on users for scheduled automatic updates installations" option. In the properties window that appears, change the option from "Not Configured" to "Enabled". Click "OK" and close Local Group Policy Editor. Windows will no longer prompt you to restart after automatically installing updates.
>
>I meant I need to make sure that Windows will not automatically restart after an update. For example, it is 3h00 am and I have about 20 windows opened. The last thing I need is to see that a restart has been done overnight when I was sleeping. Is this the setting you think will resolve it?

errr no I think that just reboots without even asking you...

Update: Actually, take a look at this link - which looks pretty much word-for-word what I found...

http://www.ehow.com/how_5573302_disable-windows-auto-update-restart.html

...so I think it disables it.