Hi Jon,
We use update manager and are very happy with the product. especially in combination with DRS.
We only use update manager to update our ESX host.. scans for new update are set to automaticly every day.
When the baseline is not compliant anymore we use manual remediation for the ESX servers.. but we always first test te updates on a couple of ESX test hosts..
p.s. did you see this document ?
http://www.vmware.com/pdf/vi3_vum_10_admin_guide.pdf