It is possible to never connect the offline laptop to the internet?
Yes, in fact, it is recommended.
Do I need to update win7 at all?
No.
What about the bitcoin armory client? Needs updates?
There is no need to update unless there is a new feature you want or your version has a bug.
Do you put these updates on a USB drive and update from it?
Yes, you can download the latest Armory client on a separate computer, and update the offline computer from a USB drive.
Where do I purchase my bitcoins without compromising the security of this Armory setup?
![Huh](https://bitcointalk.org/Smileys/default/huh.gif)
You've been misinformed here. Your bitcoin client does NOT need to be online in order for people to send you BTC. You just need a bitcoin address from your offline wallet. If you want to confirm you have received the coins you will need to create a watching only wallet on your online computer.