I've read the documentation on Update Manager 5 and it appears as if it no longer provides the ability to download, scan for and remediate Windows patches.
Here is a snippet of the documentation:
Note
#Update Manager 5.0 does not support virtual machine patch operations.
Update Manager scans and remediates Windows and Linux virtual machines for VMware Tools and virtual hardware upgrades.
#Update Manager 5.0 does not support virtual machine patch baselines
Those were all taken from here:
http://pubs.vmware.com/vsphere-50/index.jsp
Although I've read and re-read the documentation I'm very surprised. Can someone please confirm this for me?