I happened upon a computer today that hadn't been used in a couple years and was running Firefox version 1.0.6. That version still had a single X on the far right side for closing tabs. It wasn't until later that each tab got its own little X.
Clicking on "Help -> Check For Updates" told me that the latest version was 1.0.12. Nothing about version 1.5, 2, or the just-released 3. Likewise, when Firefox 2 users check for updates, they are only told about the latest go-round for version 2, nothing about version 3.
In general, the way Firefox self-updates is very well done. This is born out in the stats below, an excerpt from a website activity report showing, for this month, how many hits the site experienced from people using Firefox version 2.x. As you can see, the vast amount of Firefox 2 users are using the latest edition, 188.8.131.52.
Is the failure to look up the version ladder a bug or a conscious design decision? Either way, there are, no doubt, computer users that never got the memo, people still running Firefox version 1.0.12 or 1.5.x, thinking they have the latest and greatest.
Self-updating Firefox from version 2 to version 3 now, would be a mistake. While a new version is new, the decision to upgrade should not be automated. However, at some point Mozilla will stop maintaining version 2, a condition techies refer to as "end of life". Here's hoping that when version 2 hits EOL (the mandatory TLA) that the update checking is a bit more self-aware.
Update June 26, 2008: According an article today at arstechnica, "...Mozilla told us that they have not finalized the schedule for when Firefox 3 will be made available to Firefox 2 users through the update channel, but they suspect that it will happen within the next two or three months."