I have all the Windows XP updates available and my 88 is just fine at shutting down and hibernating etc, typically a hang on shutdown is caused by a bad driver thats not "letting go" or isn't set up correctly for this.
For instance i have a pcmcia CF reader if its plugged in with or without a CF card in it won't let my machine shutdown, just hangs.
Also on the HP laptop I have some people installed the "6 in 1" driver set for the ide, audio etc and it updates the IDE to a SCSI style driver, which improves the performance, however with the side effect that you can no longer hibernate. (the fix is not installing that part of the update)
BootVis has a trace mode to help you find out whats causing shutdown problems, I so far haven't had a shutdown problem it didn't find, its also a great tool to improve boot times ( only under XP )http://www.microsoft.com/whdc/hwdev/...t/BootVis.mspx
Like i said typically its the fault of the driver makers, which is why WHQL can be a good thing, they just don't add the hibernate code or do enough testing, usually the don't have the resources and they are unwilling to pay for WHQL testing, which may not be perfect but helps a lot.
As for not installing updates, its fine to maybe wait a week or two(unless you are at a corp with security issues or such) and see if theres any major problems, updates are rarely pulled but if they are its typically very quickly, think about the sheer number of people installing those updates, problems are found quickly, only if its a small subset of people will it take longer, but thats the nature of hardware/software.
Hope you find your problem.