I need to deploy and OSD task sequence so that the end product is a Windows 7 OS in a workgroup i.e. not domain joined. It still needs to be managed by Configmgr and get scep updates, windows updates etc...

In the task sequence itself there is a step called "Setup Windows and ConfigMgr". Is this where I can add some command switches or is there a better way to ensure the client is installed as part of the tasks sequence so that it can be fully managed?

Yes.

SMSMP=managementpoint.domain.com

 The Setup Windows and ConfigMgr task always installs the ConfigMgr client agent -- this is not optional. For workgroup clients, adding the SMSMP property to the property box of this task (as noted by narcoticoo) is generally recommended to ensure that the client agent knows which MP to use during client installation.