distro with most updated software

Ale

1) Which distros have the most updated software?

Example: Firefox 3.5, Thunderbird 3.0 beta, Openoffice 3.1

2) Which distros have the automatic software updates engine?

I avoid the terrible commands on terminal to upgdate Openoffice in Ubuntu!

Set_Killer

Archlinux is good choice. installation is in text mode. to update the whole software you should do:

pacman -Syu

as root.

also i think that there are few GUIs for pacman. also there is big wiki if you like reading,,,

and one more thing: if you want closed source ati drivers you should build them from AUR. they are not in the official repo.

Goineasy9

Arch, as mentioned above.

Fedora 11 - for the rpm lovers.

sidux - for those that like the excitement of Debian sid.

I haven't used Arch yet, but right now I have Fedora 11 and sidux installs. When Fedora 11 was released at the beginning of June, it already had the beta of Firefox 3.5. Debian sid/sidux needs access to the Debian experimental repo to pull it's version of Firefox 3.5 called Iceweasel, also version 3.5.
While I ran nothing but Debian sid for a couple of years, recently, I have found that newer packages are slow to hit the repos. Now that I have active Fedora installs, I can see that the newer versions get into their repos faster. Similarly, since I talk to Arch users, I can see that their repos are also updated fast.

All these distros have automatic updating features, although with Debian, you need the cli to pull things from experimental, and with missing dependencies, it can get ugly.
Right now my choice is Fedora 11(for ease of install and updates).

Rovanion

Any distribution with a rolling release scheme will probably be the most up to date ones. Examples of these are Archlinux and Gentoo.
But it's quite common that you can get the latest software from unofficial repos for your other distributions. I'm running Firefox 3.5 in Linux Mint. I got it trough a PPA.

And a popular GUI for pacman is Shaman. It's actually one of the best GUIs for package management I've seen out there.

The reason why commands are used when explaining how to install experimental software is that it's sooo much easier to give the user a command that automaticly installs the application instead of giving 5miles of GUI instructions that can be misunderstood. And also, they are used to scare away people from experimental software. There is a reason for not putting unstable in the official repositories.