Dynamic Update requires IE5 or later - not IE4 or later.

bdrebenstedt

IE4's SSL functionality is not compatible with dynamic update. This is according to MS. I've personally not tried it. The answer to one of your 70-270 questions lists IE4 as a minimum requirement.

http://technet2.microsoft.com/windowsserver/en/library/187e2ed5-9f06-4bd4-9d77-8fb28e53f8861033.mspx?mfr=true

sprkymrk

Read your link again, it seems that's only if you are upgrading a Win95 install.

Check here:
http://technet.microsoft.com/en-us/library/bb457102.aspx

Dynamic Update downloads the installation and device driver files to your computer and incorporates them into the setup process. To initiate Dynamic Update, the computer you are upgrading must have the following:

Internet connection capability

Microsoft Internet Explorer 4.0 or later installed

and here:
http://technet2.microsoft.com/WindowsVista/en/library/477937d1-6c3a-4d9b-b7fc-343e2e1cc44d1033.mspx?mfr=true

Using Dynamic Update
For Dynamic Update to run during Setup, the computer needs an Internet connection (or access to a network share containing updates downloaded from the corporate catalog on the Windows Update Web site) and Internet Explorer 4.01 or later.