I think the autoupdate will be carried out even if any of the options (dial up and/or permanent connection) is checked.
avast checks if there is an available connection each 40 seconds.
If there isn’t, wait more 40 seconds to check. Checking does not take more than one second and, of course, does not use the Internet band.
If there is a connection, check for an update. If there is not any new file to download, wait 4 hours to start checking again. If there is an available update, start it and install it. Again, wait 4 hours to check the next time.
Some of this settings could be configurated different, I posted the default values of the avast4.ini file.
The updates are incremental. This is the wiser method of updating I have ever seen in a antivirus 
The program updates are released but to avoid excessive load on the servers the auto update check happens randomically every 7 days and it’s not checking every time you connect to the Internet as with the iAVS checks.
You can however, as you have found perform a manual update. Monitoring the forum ALWIL Software Announcements will give forum regulars a heads up on any announcements, like updates, etc. So forum users have another benefit.