I have the same issue. I was wondering if there will be a way to use the auto-update feature if I go and download the file myself and put it on the server. It would save me the time of moving the files around by hand and I would be more inclined to upgrade more frequently. I am sure the auto-update script puts the downloaded .zip file in a specific location and continues from there, I just have not taken the time to try and figure it out. I have ftp setup correctly on the host it just gives the error:
Downloading update from http://ww.wp.xz.cn/wordpress-2.7.1.zip
Download failed.: couldn’t connect to host
Installation Failed
Thanks for any help or suggestions.