Yes, I agree the Cisco recommendation is bad. And yes, you will block critical Windows ports that will not allow any Windows type of connections. I believe this was a first step by Cisco to stop the spread of malicious code. Now I think there is an IOS patch that will fix the problem within the router and switches, so you don't need to block them.
Furthermore, I think Cisco was making a general statement for fast fix so they could then update the IOS.
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This was first published in September 2003