You don't update from the menu's. You do it from the control centre. Click on the control centre and then software management.
Mandrake allows you to install from cds' and one online update_source.
You can add a new one but it has to be used on it's own by unchecking the update_source.
All a bit pointless as you only need a single update source.
This is my setup for media manager.
update_source
ftp://ftp.lip6.fr/pub/linux/distrib...pdates/9.2/RPMS
../base/hdlist
Installation CD 1 (cdrom 1)
removable://mnt/cdrom/Mandrake/RPMS
../../Mandrake/base/hdlist1.cz
Installation CD 2 (cdrom 2)
removable://mnt/cdrom/Mandrake/RPMS2
Internationalization CD (cdrom 3)
removable://mnt/cdrom/Mandrake/RPMS3
../../Mandrake/base/hdlist3.cz
the second entry works even though it doesn't have a hdlist (bug, feature?).
Not sure about the nobody group, but I think that is just a null group to control access to any servers you have running. It isn't for use at the machine, it is for use by other people when they ftp to your server. Ignore it, by default it has no access to any part of your system so isn't a security problem.
If you are really worried about it run
configuration->other->userconf