So my question is this: is this a standard thing in a large operation or is this as unreasonable as it feels?

I think that depends on the business. The machines in my dad's office don't get OS "upgrades". They get wiped. Since the average user in the 17-person office does nothing more than desktop publishing and email/calendar stuff in Groupwise, there is no downtime at all. All the user's files are stored on a main fileserver, and the email and calendar data have their own server as well.

So when we get new machines in the office and are migrating to a new OS, we merely set up a machine with everything our average user needs, and ghost it to 16 other disks. Then we install specific software (databases, graphics programs, etc) as needed.

Typically our users, despite being hopeless when it comes to computers, are inconvenienced for about 10 minutes while we change boxes.