When you update an extension it get's listed in the extension manager as: "This item will be installed after you restart Firefox" but it's already installed I just updated it. So the text should say something like: "This item will be updated after you restart Firefox" Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.7.5) Gecko/20041115 Firefox/1.0
Perhaps a "This item will be active after you restart Firefox" will be better, since there is nothing to update really :)
"This item will be active after you restart Firefox" isn't right either because the extension's old version is still active until you restart.
Currently the info states: "<em:name> will be upgraded the next time you restart Firefox." So I consider this bug as fixed. Mozilla/5.0 (Windows; U; Windows NT 5.0; en-US; rv:1.8b2) Gecko/20050511 Firefox/1.0+
Per comment #4 and my own testing this is WFM on the trunk