For example I installed VLC from the Ubuntu Software Center would it also include VLC's PPA repository so that when my laptop would do a software update, VLC updates would automatically be included for updates? Or should I manually add VLC's repository via terminal despite installing VLC through the Software Center?
Typically apt does include PPA repositories if the PPA has a newer version available, and Ubuntu Software Center uses APT, so if the PPA has a newer version, it will use the PPA. If the PPA has a older version, it will use the repository with the newer version.
No, installing a program from the Software Center will not automatically include the PPA
If you want updated versions of e.g., VLC, that are only available in the PPAs and not in the official repositories, you will have to add the PPAs manually, regardless of whether you have already installed VLC from the Software Center or not.
Now, once you have added the PPA, Software center will use it to update those particular programs.
Warning: While the software in PPAs is often newer, it may also be unstable, partially incompatible, etc. -- remember that it has not been extensively tested by the Ubuntu team as the official versions are.
Please see these related questions for details about PPAs: