Users were complaining about getting a Java update pop up window every time they logged into a terminal session. I had pushed out the appropriate registry settings via GP to prevent this on the desktops, but obviously something special needed to be done for the server. Aster doing a little research I found that there is a subkey located at HKLM\Software\Wow6432Node that contains the relevant settings for 32-bit applications.
I was able to disable the updates by setting the EnableJavaUpdate key to 0 in HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\JavaSoft\Java Update\Policy\
Just to make sure, I also deleted the key HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\Windows\CurrentVersion\Run\SunJavaUpdateSched to prevent the update utility from starting.
No more pop up windows = happy users!