Component technologies are increasingly being used to develop and deploy distributed real-time and embedded (DRE) systems. To enhance flexibility and performance, developers of DRE systems need middleware mechanisms that decouple component logic from the binding of a component to an application, i.e., they need support for dynamic updating of component implementations in response to changing modes and operational contexts. This paper presents three contributions to R&D on dynamic component updating. First, it describes an inventory tracking system (ITS) as a representative DRE system case study to motivate the challenges and requirements of updating component implementations dynamically. Second, it describes how our SwapCIAO middleware supports dynamic updating of component implementations via extensions to the server portion of the Lightweight CORBA Component Model. Third, it presents the results of experiments that systematically evaluate the performance of SwapCIAO in the context of our ITS case study. Our results show that SwapCIAO improves the flexibility and performance of DRE systems, without affecting the client programming model or client/server interoperability.