Is there an update application in Fedora that auto updates your system?

You can do it via cron. In fact, you may even have something for this already. Check under /etc/cron.weekly and see if you have something about yum.

If you edit this file, it's pretty much doing a weekly update, but it requires that /var/lock/subsys/yum be present on your system. So just do a touch /var/lock/subsys/yum and updates will start happening weekly. You really should do a "man yum" to see what all of those options mean. For example, -y means to answer "yes" to any questions yum would normally ask you in interactive mode. You should be sure that you're happy with answering "yes" to all questions. Usually it's safe to say "yes" but you may not like doing that.

I see you're on FC1... is that bc of all the stuff I've heard bad about it? I personally could not get through the installer on FC2... it crashed on me!

I migrated from RH9 to FC1 on some machines, but when I started hearing about all the trouble with FC2 I opted to hold off until they get their stuff worked out before going to FC2.

use yum.
in a terminal type
yum list (to list all of the available updates)
yum update (to install all of the available updates to the packages installed on you system by rpms)
yum install packagename to do just a specific package.
You can edit /etc/yum.conf to skip certain packages like kernels or what not.
add
exclude=kernel*
for example if you don't want it to update the kernel. the * symbol is used as a wildcard
if you want to do nightly updates, then click on theRedHat->system settings->server settings->services and check
the box next to yum. Reboot.