I was faced with the same problem last year and I wrestled with a lot of the same questions. A few bits of advice:
Since either service may be updated,
both services will function as
updaters of the other. Service A will
update Service B and vice versa. For
this reason, I suggest simply running
both services at all times. Unless
you are worried about really loading
down your server with
does-update-exist calls, the
enable/disable service management
isn't worth the overhead.
Like services can't be installed on a
single machine. In other words, you
can't install new and old versions of
the service side-by-side if they have
the same name. Unless you want to
complicate your update process, I
suggest you uninstall the old version
and then install the new version.
For example, Service A would download
Service B Installer, uninstall
Service B, install new version of
Service B and then run. Service B
would do the same for Service A.
Since each service is managing the
other, they should not only check for
available updates but they should
verify each other's health. For
example, Service A would check to see
if Service B exists and if it is
running. If the health check fails,
a list of steps to resolve the issue
and get the service running would be
completed by Service A. Executing the
health check and recovery operations
will cover you now matter what issue
arises with the update, initial
install or general operations.
Do ample logging on both the client
and the server. You'll want to track
what actions were taken and when.
For example, Service A might when it
is checking for updates, when it is
executing the health check and
associated actions. On the service
(assuming you are calling into a web
service looking for updates) track
the calls made by each Service. If
your Services aren't getting updated
at least you'll have a trail of
breadcrumbs (or lack of breadcrumbs)
pointing you to the problem.
There are literally bunches of potential gotchas with a solution of this sort: services not running at startup, UAC getting in the way, not being able to install and uninstall the services with the same user, ensuring user installing the service has ample permissions, connectivity loss, getting the .NET Framework installed on the client machine, handling reboot after install if necessary, etc.
Best of luck. It's a fun problem to solve, but it doesn't go without it's frustration -- especially since, as you said, there isn't a lot of documented information available.