I am changin the description of this bug as Defualt policy is "Before Installing" with PIT b33.
AU should work fine based on user preference

How to reproduce

1.) Install pit 6u10 b33

2.) Goto JCP -> Update tab; modify the "Notify Me:" to "Before Download" and don't close the JCP (for details see CR 6751429)

3.) Set the
"UpdateServletURL"="http://sqindia.india.sun.com/disk17/deployment/pg152891/PIPTest/map.xml"
Under this path [HKEY_LOCAL_MACHINE\SOFTWARE\JavaSoft\Java Update\Policy]

4.) Modify the system time accrodingly (5-10 minutes before the hours of AU schedule)

5.) Launch the Jusched.exe from command prompt

6.) Wait till AU schedule time is passed

Actual Behavior:
Nothing happens.

Expected Behavior:
AU should notify the user about the Update available