WSUS Offline will get you most of the way there. It's a project that will use the update information from MS's Microsoft Update servers to determine what updates to download, what's been superseded, and can create ISOs or USB sticks. You just rerun it every month and it grabs the newest information and updates.
This is a 3rd party tool, it's not made by Microsoft, and not related to their Windows Server Update Services (WSUS).
It can also install DirectX runtimes, .NET Frameworks, Internet Explorer, Service Packs, Security Essentials, C++ Runtimes, PowerShell, and updates for Office 2003/2007/2010 as well as Windows XP/2003/Vista/7/2008.
Because it only installs security updates (the same set that Microsoft's Baseline Security Analyzer checks) Windows Update/Microsoft Update will still report a number of important updates that require installation, but the system will be secure. You can also customize the program and specify extra updates to download and install (or blacklist particular updates if they're problematic in your configuration).