How Microsoft finds out what's on your PC
The German tecCHANNEL site has a technical article describing how they were able to sniff out the kind of information transmitted from your PC when you run Windows Update.
We believe that the biggest privacy issue with Windows Update is the list of hardware components that is transferred to the Microsoft server, which reveals the make and model of all installed PCI cards, mass storage devices, and other hardware components to Microsoft. ... Why does the current version implement an approach that transfers the information required for the filtering from the user's computer to the Microsoft server, which then does the filtering and returns a list of updates that is tailored to the configuration of the user's computer?
The tools they use are available for download along with the PDF version of the article.