I'm using the auto updaters without problems, both on a Vista and Windows 7 machines, including a Netbook with Win 7 Starter Edtion.  I haven't looked at whether the old version is completely removed but as I'm not having problems and not having any hard drive space capacity problems I have to assume it's working OK. 
What is the best way to update my Adobe Reader, Adobe Updater, and Adobe Flash Player?  I periodically get pop ups from the respective Automatic Updaters to update my current versions.  These programs are notorious for being security risks if not kept up-to-date, but I'm hesitant to update via the auto updaters since some users have had problems with that method.   I currently have Reader v8.1.7 ,Updater v5, and Flash Player v 10.0.22.87 (shows up in Programs & Features as "Adobe Flash Player 10 Active X"  -- and I'm not sure if that is the actual Flash Player or it's Active X control or if they're one and the same).   I also have Adobe ExtendScript Toolkit 2 v2.0.2  and Spelling Dictionaries Support for Adobe Reader 8 in Programs & Features as well (don't know what to do with those).
Updating Adobe Software