Ahem, right. Getting back to the original question.
If your Windows environment, even in VPC, is open to the internet, it's going to be susceptible to every irritation the Windows world knows (and they are legion). I think the only thing that VPC maybe does for you is give you the benefit of the OS X firewall. But you are vulnerable to all the same security exploits that any other Windows user is.
So yes, you really should install all of those updates.
SP2 in particular does a *lot* for you, so that should be on your definite list....