I get a lot of traffic on the site due to my post on getting direct (non-FTP) updates to work on WordPress 2.5. This method worked up until 2.7.x. With 2.8 out this week, I found during my svn switch a conflict was created due to a code change in file.php. Looking at the changes, it looks like the wordpress developers created an easy way for one to short-circuit the update to use the method you want via a setting in wp-config.php.
So, in brief, the permissions and
WP_TEMP_DIR settings from the older article still stand. However, you no longer need to edit
wp-admin/includes/file.php. Now you just need to edit your
wp-config.php and add the following towards the bottom: