I could reproduce it on XP and Win 2000 both.
How to reproduce
User Account is Admin ( I never changed the account type during testing)

1.) Make sure no JRE is installed

2.) Install the latest PIT bundle from following location
http://j2se.east/arc/1.6.0_12/pit/2008-11-26/windows-i586/

3.) Go to update TAB in JCP and note the update schedule. Make sure System date and tiome is different from the Update schedule.

4.) Launch jusched.exe. Wait for 5 mins and Java update ballon will be shown in the system tray.

Issue here is
1.) Java Auto update schedule setting is not being honored

Jusched.log
-------------------------------------------------------
Wed Dec 03 14:25:30 2008
:: jusched Main() - ResetDefaultUpdateSchedule

Wed Dec 03 14:25:30 2008
:: OpenJavaFXUpdateKey: Error:2, ErrorCode:0

Wed Dec 03 14:25:30 2008
:: SetDefaultJavaFXUpdateSchedule: Frequency:8, ScheduledHr:14

Wed Dec 03 14:25:30 2008
:: GetJavaFXUpdateTimeKey: returning FALSE

Wed Dec 03 14:25:30 2008
:: lastFinish=NULL

Wed Dec 03 14:25:30 2008
:: lastFinish=NULL

Wed Dec 03 14:25:31 2008
:: http://j2se.east.sun.com/arc/1.6.0_12/pit/2008-11-26/windows-i586/PLUS1/iftw/1.6.0_13-b702.xml
Wed Dec 03 14:25:32 2008
:: Saving Update Descriptor XML Data

Wed Dec 03 14:25:32 2008
:: Started UpdateChecker process Successfully:c:\Program Files\Java\jre6\bin\jucheck.exe

Wed Dec 03 14:25:32 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293668, hours=81), actual sleep=295734000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:32 2008
:: Registry is changed.

Wed Dec 03 14:25:32 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293668, hours=81), actual sleep=297170000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:32 2008
:: Registry is changed.

Wed Dec 03 14:25:32 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293668, hours=81), actual sleep=297206000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:32 2008
:: Registry is changed.

Wed Dec 03 14:25:32 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293668, hours=81), actual sleep=295076000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:33 2008
:: http://j2se.east.sun.com/arc/1.6.0_12/pit/2008-11-26/windows-i586/PLUS1/iftw/1.6.0_13-b702.xml
Wed Dec 03 14:25:33 2008
:: Registry is changed.

Wed Dec 03 14:25:33 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293667, hours=81), actual sleep=293749000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:34 2008
:: Saving Update Descriptor XML Data

Wed Dec 03 14:25:34 2008
:: Registry is changed.

Wed Dec 03 14:25:34 2008
:: Using Sync download
Wed Dec 03 14:25:34 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293666, hours=81), actual sleep=295993000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:36 2008
:: InstallStatus:ret=200 visid=113615049-364986598 method=jau state=ud ver=1.6.0_12,1.6.0_13-b702
<?xml version="1.0" encoding="UTF-8"?>
<status>SUCCESS</status>

Wed Dec 03 14:25:36 2008
:: Registry is changed.

Wed Dec 03 14:25:36 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293664, hours=81), actual sleep=293801000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:44 2008
:: Registry is changed.

Wed Dec 03 14:25:44 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293656, hours=81), actual sleep=296488000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:44 2008
:: Download Status: Stage2 PreDL Success
Wed Dec 03 14:25:44 2008
:: Registry is changed.

Wed Dec 03 14:25:44 2008
:: Download Status: Download Complete
Wed Dec 03 14:25:44 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293656, hours=81), actual sleep=296015000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

Wed Dec 03 14:25:44 2008
:: Registry is changed.

Wed Dec 03 14:25:44 2008
:: nextSched=Sun Dec 07 00:00:00 2008
; sleeptime (sec=293656, hours=81), actual sleep=294067000 msecs
lastSchedTime=Fri Nov 07 00:00:00 2008

-----------------------------------------------------
Note: changes from
*** (#1 of 1): 2008-11-29 12:28:29 GMT+00:00 ###@###.###
to
*** Last Edit: 2008-11-29 12:41:37 GMT+00:00 ###@###.###
only added "I could reproduce it on XP and Win 2000 both."