Mozilla is currently testing an update process for those people who will be making major updates (such as from Firefox 1.5.x to Firefox 2). They currently activated the new process for people who are upgrading from one nightly build to another nightly build.
The reason they are doing this is because some people don’t like to update to the latest software, heck, some people are still using Firefox 1.0.x! For that reason they don’t want to constantly bug people to upgrade to the latest version which is why they allow people to choose “Never” to upgrade to the latest major release.
The “Update Available” screen:
The license agreement (not exactly completed) :)