I have several software packages on my Mac which have auto-update features: Microsoft Office, Adobe CS2, and of course MacOSX.
There is a right way and a wrong way to handle auto-updates. The right way is to have some regular schedule (weekly for Apple, monthly for Microsoft). That way I can schedule the update for some time when it won't interrupt what I am doing (e.g., first thing Monday morning, for Apple), even if the update process needs an administrator password, as Apple's does.
The wrong way to do it is to go looking for updates when I start up the program, as Adobe does. The concept should be simple: If I start up a program, it's because I want to use that program, and I want to use it NOW, not 15 minutes later when the updates (which almost always require me to quit the program I'm trying to use) are complete. As Vince Flanders so eloquently put it: I don't care about your $#@!$#@ problems, I want you to solve my $#@!$#@ problems.