up2date also has an option in it's config to not keep rpms after downloading and installing them. Look in /etc/sysconfig/rhn/up2date config file, for :
keepAfterInstall[comment]=Keep packages on disk after installation keepAfterInstall=0
zero means "don't keep them" . The up2date cache will no longer have lots of old rpms laying around...
I do this :
Setup a local web server to serve up the updates
Find a good mirror that provides rsync service. rsync the the local web server's updates directory once a day (Keeps the files updated)
Run up2date on all machines (Including the one running the web server), set them to not keep rpms after they update.
Cheers, Michael