It downloads the update automatically, but it will prompt you to restart a while after the update is downloaded (if you haven't restarted on your own). We are actively working on making the whole process less intrusive and more seamless.
This is because Chrome has a little disassembler built into their binary-diff mechanism, so they can get really small diffs (at least on Windows; for Linux they fall back onto bsdiff).
The update server was delivering the ~8mb patch at about 4kb/s this afternoon. It took me several minutes to update.
Even when update servers aren't dying under heavy load, my internet connection isn't very fast. There are many people who don't have fast connections, both in the US and elsewhere. Programs downloading things in the background render web browsing noticeably slower and make voip unusable. Update size matters.
Glancing at stats from Point Topic[1] and Internet World Stats[2], it looks like only a quarter of the world's internet connections were broadband in 2009. If one is building software for a global user base, a fast connection is not a given for most people.
https://wiki.mozilla.org/Software_Update:MAR
It downloads the update automatically, but it will prompt you to restart a while after the update is downloaded (if you haven't restarted on your own). We are actively working on making the whole process less intrusive and more seamless.