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I've configured our Windows 7 clients to have "Shut Down" replaced with "Log Off" as the default button on the Start Menu in the labs on our campus using Loopback and

User Configuration\Administrative Templates\Start Menu and Taskbar\Change Start Menu power button

The problem is that if there are Windows Updates pending, this changes back to Shutdown and I don't see a way to alter this behavior. I would like it to always be "Log Off" regardless of whether or not updates are pending.

AD is at a 2008R2 DFL and FFL and third party templates aren't an option, but additional Microsoft templates not included by default are fine.

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Do you have anything configured under Computer Configuration/Administrative Templates/Windows Components/Windows Update Do not display 'Install Updates and Shut Down' option in Shut Down Windows dialog box? – jscott Sep 27 '11 at 14:10
@jscott - It's not configured. Will enabling that change the Start Menu power button? – MDMarra Sep 27 '11 at 14:45
up vote 3 down vote accepted

I had to deal with some of these settings when I set up a WSUS server. For whatever reason, not all start menu options are in the start menu configuration. Go to the path below in your gpediter (local or system wide)

Computer Configuration\admin templates\windows components\windows update then look for "Do not display 'Install Updates and Shut Down' option in shut down windows dialog box" 

Change that value to disabled and it should fix it.

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