Here's what I've gathered so far....
First of all, I apologized to all as I was confused about the components that I'm inquiring about. I was referring to Live Update Administrator and incorrectly used SEPM instead.
Primary/Secondary is utilizing LUA to pull content updates from the Live Update server in the Test environment. LUA is not used to update clients.
Yes, it would appear Live Update Administrator and SEPM are installed on the same box. This is how it was set up when I started here. So my question is LiveUpdate Administrator on version 12.x backward compatible with version 11.x, where it can still push content updates to the Secondary/Primary environment.
I will read thru the Best Practices as we start our planning to Windows 2008/SEP 12.x
Hope this clears up any misunderstanding.