I'm 99.99999999999999% certain Windows Update isn't it. For one, it uses BITS, which only uses idle bandwidth. Two, it's likely you've turned it off or set the setting to notification only. And three, by default, Windows Update only checks for new updates every 22 hours +/- 30 minutes, unless it has been changed through Group Policy or a Registry setting.
Browsing through a VM is arguably slower due to the fact that it's, well, in a VM.
IMHO, the biggest factor in Internet responsiveness is the router. A good router will do wonders for your browsing experience. When I was little, I've always wondered why Cisco routers sell for so much. I always though, "all it does is bucket brigade a bunch of packets. . ." I'd list your router and model.
I'd also look at getting a router that supports dd-wrt. The QoS protocol may be of some use for responsiveness.
It can't be Windows Update if the browsing in the VM is fast since the browsing in the VM still has to go through the host computers networking interface. Most other issues that would cause slow browsing would affect the host and the VM to the same degree as well. You need to look at what is different in browsing in the VM from browsing in the host. What browser are you using? – Mr Alpha – 2011-08-17T13:32:03.903
i tried firefox ie9 chrome opera and safari on win7 and chrome firefox on xp, all the latest versions. i would say it is pretty sure that it's not a browser problem. something crazy's going on there, maybe some driver issue on ndis. but why the heck is the vm running then? i have no clue :/ – JohnnyFromBF – 2011-08-17T14:46:18.230