It should be noted that you'll have to tap on the icon and tell it to install the updates. It will automatically notify you of updates, but you still have to manually start the update process.
The codename for the SSU releases wont be changing so, technically, Diablo will remain the latest until Fremantle (presumably Maemo 5) is released. What will be changing (actually, I'm more like 99% on this one, but still) will be the OS version (i.e., 2.2008.51-3, 4.2008.23-14, etc.).