Is it possible to update a website and a Web service hosted in IIS using wyUpdate and how?
Yes, we have a number of customers who do this. A good place to start is the step-by-step walkthrough.
If possible, can i schedule a windows task through which wyUpdate will check and update on an time interval basis.
That's one way to do it. It's better to run wyUpdate from a Windows Service if you want truly "hands-free" updating. See: How to Silently update a Windows Service.