One issue that sometimes pops up currently is the failure of post-install scripts when Cygwin's DLL is being replaced. I know that you can run into trouble if a daemon is currently using the DLL when you update the cygwin package, at least.
Perhaps a two-part install wouldn't be that bad, as long as the base Cygwin installer automatically kicks off the package updater and the package updater can kick off the base Cygwin installer when needed/requested. The base Cygwin installer could then be done using MSI or whatever and could initiate reboots/etc. as needed before starting the package updater. gsw
