With regard to the update settings, I like to stick with what was (and I think still is) the defaults, auto for definitions and ask-when-available for program upgrades. Avast uses incremental def updates which are a breeze, take only a few seconds even on dialup (which I've got), plus they're "transparent" in the sense that they become effective immediately and don't require you to do anything to activate them.
Program upgrades are quite a bit larger, plus more often than not require a reboot, so like David I prefer to simply be advised of them and pick my own time to download and install.