Way back in the not-so-distant past the only way to update WordPress was to download (wget/ftp) updates, plugins and themes, unpack them and perform the update/install.
It is possible to pull the latest builds from subversion – but that’s really focused on the core hacker.
New in WP 2.7 was the ability to update automatically.
There were a few challenges with this – permissions, PHP modules, various host implementations – but I found it generally quite successful.
I found a great FAQ here – http://dd32.id.au/2009/02/20/wordpress-filesystem-abstraction-faq/
From the same author is a very cool plugin – core-control – it lets you enable and disable various transports – and shows the status of them.