Killer.dll is a supplied DLL with the Software Update Wizard and is used by WebUpdateSvc4.exe, the service component of the Software Update Wizard, to manage the closing or termination of the application which is about to be updated (because you cannot update a file while it is being used by Windows).
In other words, when your update script uses the KillProcess keyword to close your running application to allow it to be updated the WebUpdateSvc4.exe service application uses exported functions from killer.dll to manage the close processing.
The reason why the application termination process is handled via a DLL is largely historical. The Software Update Wizard is built using an earlier version of the Microsoft runtime libraries which do not support API functions which were added from Vista / Windows 2008 onwards. However, the best method for handling application termination (especially for 64 bit applications from a 32 bit process like the Software Update Wizard) requires post Vista APIs. Therefore we built killer.dll as a simple Win32 DLL using a later version of the developer tools.
The Software Update Wizard uses the exported functions from killer.dll for application termination on platforms from Vista / Windows 2008 onwards.
On prior platforms the Software Update Wizard does not even load killer.dll and reverts to an earlier, slightly less powerful method for terminating the running application. The earlier method works 100% effectively on 32 bit platforms but fails gracefully on 64 bit platforms. So users of 32 bit XP will experience exactly the same update process success as users of more modern platforms. Any users of 64 bit Windows XP or Windows Server 2003 will be asked by the Software Update Wizard to manually close the running application to allow it to be updated