setup a windows update server

Hi all,
I have got a network with about a thousand windows boxes:
- 70% XP (Home FR & Pro FR)
- 20% Vista (Several flavours)
- 10% Other Windows

We are behind an expensive & slow Sattelite connexion and I would like to
optimize bandwidth consumption.
The first thing would be to locally (on our big LAN) mirror Windows update.

Have you got a detailed documentation on how to setup such a thing? (legal
and technical)

Will the workstations needing update automatically query the local mirror
instead of external ones?

Thanks for any tips.