Steps: 1. Install an old version of an add on * I used the OWA extension (http://people.mozilla.org/~dclarke/openwebapps/Extension/older/openwebapps-0a8dcd620f-12_07_2011.xpi) 2. Go to the Add-On Manager under extensions Expected: I should see a notification under the add on that an update is available and that it can be applied (similar to going to Help --> About Firefox and seeing the "Apply Update" button occur if the Firefox version is out of date). Actual: No notification for the add on update is shown. From a user's perspective, this is problem, as they may not know that they are running an outdated version of the add on.

Does it not install the new version when you check for updates from the add-ons manager?

Yes, it does install the add on when "Check for Updates" is selected after right clicking the add on. Note: This bug was filed as a usability concern. The functionality in the current path ("Check for Updates") does work.

So we do the update check once a day so I think what you're asking for is bug 296173. Please re-open if that isn't the case though.