The painful days of updating Android apps one—at—a—time might be at an end with Android 2.2. But is automatic updating really preferable to an "update all" button? It opens questions, and doors, possibly bad ones.[Phandroid]
I'd love an automatic update system instead of the stock "update this app" implementation. Apps that have memory leaks can become real processor/RAM hogs and if you don't stay on top of updating, your phone will become nearly crippled and you won't have any idea why.
But, then comes the problem of having the updates running all the time. How would it affect my phone's speed?
Depends on the hardware. And since it depends on hardware there really is no downside to having an automatic updating process.
2.2 won't ever be available for last generation hardware(anything sub-800mhz/256mbRAM) so the possible lag or performance troubles with updating will be all but unnoticeable.