This is a little bugbear of mine. My class have ipads. We bought 16GB ones.....which insist on downloading updates in the background (basically taking up 10% of the space - or typically nearer 33% of the free space). Normally when the kids pick one up the install dialogue box pops up. Also, normally when the kids pick one up its because we have stuff to do (waiting 15 mins for an update to complete isn't really an option when you have only got 20-25 mins to get work done).
The only options the ipads have is install or not now. And not now just pops up another one for remind me later or install tonight. Except the install tonight option doesn't work if you don't keep the ipads on charge over night...like when they are locked in a cupboard.
So. they don't update on their own, I don't want my kids wasting their time watching the progress bar chugging along, the updates take 33% of the space up until you delete the update, there is no option to not install the update, only delay the nagging prompt, and when you delete the update it redownloads itself in the background.