My own observations (and I could be totaly off base)
I have yet to hear of a successful update.zip, so I'm wondering if their recovery is borked, right now.
Look at their LCD.zip. It's an nvflash format, and yet there's still some remnants of an update.zip, namely the command file. My guess (and it's only a guess) is that they were initially going to create the fix using recovery, and then switched over to nvflash later.
Has anyone managed to get an update.zip working, yet? Man, I wish I had an Adam just to punch this through and get it fixed - I hate sitting on the sidelines like this.
Android devices: ASUS Transformer, Notion Ink Adam, Cowon D3