Does SEP product have the capability to manage both the latest version and legacy products of AV products?

NO, SEPM manages only the SEP clients.

Does SEP allow bandwidth optimization for updates as a single update from the internet? and does the updates take place in incremental delta? kindly explain. tnx so much.
SEP downloads the update in incremental delta.

What exactly you want to do?

Do you want to update both
SEP and SAV from same server? Then you can use an Internal Live Update server
for this

for configuring LU server
refer the links below

Installation and
configuration of LUA
Configuring Distribution Center in LUA

Hi Sir

Thanks for your answer. How about the bandwidth optimization for updates as a single update from the internet?

hi,
let me know if this link helps
throttling through IIS

http://service1.symantec.com/support/ent-security....

As far as the bandwidth feature is concerned it has been enhanced in the latest version of endpoint under Group Update Provider:

■ Limit the amount of bandwidth that the Group
Update Provider can use when the Group
Update Provider downloads content from the
management server.

■ You can define a Group Update Provider by
using rules and conditions, such as an IP address
or host name. You can configure a single Group
Update Provider in a single LiveUpdate Policy
that applies across multiple groups for multiple
clients.
■ Define clients to connect to a Group Update
Provider within the same site to improve
performance.
■ Identify which clients act as Group Update
Providers.

http://service1.symantec.com/support/ent-security....

New features and functionality in RU 5 GUPs:

Ability to limit the amount of bandwidth that the GUPs can use when it downloads content from the Symantec Endpoint Protection Manager (SEPM) from within the policy on the Symantec Endpoint Protection Manager, rather than modifying a registry key.
Ability to define GUPs by using rules and conditions, such as an IP address or host name, registry key or registry key value.
Ability to configure a single GUP in a single LiveUpdate Policy that applies across multiple groups for multiple clients, rather than needing a group for each GUP.
Clients will attempt to connect to a GUP in their local subnet by default.
Clients acting as GUPs are easily identifiable in the SEPM.

If you are using Internal liveupdate it can provide delta updates....

You can also specify the overall bandwidth which can be used by Liveupdate server...
If you want to optimize the bandwidth for all clients (SEP and SAV) you can do some registry modifications in the client and can be achieved (for this you may req. LU 3.3 or later .I am not sure about old versions of LU) .. 

 its actually under Admin -Server- Local Site - proeprties - Liveupdate - Contents Type to Download- Change Selection