We do not recommend doing this.
Updates provide important security patches as well as new features and bug fixes. One webOS-internals team member (tharris) has identified over seven security errors in webOS as of 20 July 2009, and that process is far from done.
That being said, sometimes an update only disables functionality, such as the 1.0.4 update, which prevented apps from being installed through email link (but which was required to fix a huge unintended security hole).
Here is a quick and dirty way to block webOS updates:
cd /usr/bin mount -o remount,rw / chmod -x UpdateDaemon mount -o remount,ro /
Then, either reboot or execute:
No more executing the update program.
If you disabled your update you might want to re-enable it at some point.
cd /usr/bin mount -o remount,rw / chmod +x UpdateDaemon mount -o remount,ro /
Then restart your phone and automatic updating should be back.