What does auto-update update?
I noticed that, sometimes auto update updates not only the virus definitions but part of the application as well but the version of the application remains same.
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I think it updates whatever it needs to. It will check regularly (I think the default is every hour) to see if you are up to date. Normally only the virus definitions need updating, but I think there is a regular montly update when all the monthly updates are consolidated into the engine itself (this keeps things small and tidy). If a newer version of the product is available it will automatically update that too.