We have a windows 2003 standard edition pdc with two terminal servers... Do I update the three of them just like I do a regular desktop? (open explorer/tools/windows update, etc)... Thanks

Yes, you can. However, there are other additional steps I'd consider prudent before doing so depending on the consequences of your servers being down due to a faulty patch job: patch and application testing on a "don't care" server first, stopping services, and creating a full server backup image for quick roll back to name a few.