This is fixed in Karmic, and bzr revision number 510, at least.
<short>Hide the reboot notification</short>
<long>Do not display a reboot required icon or dialog. This is
useful for sysadmin who want to prevent this feature from users.
</long>
** Changed in: update-notifier (Ubuntu)
Importance: Undecided => Low
** Changed in: update-notifier (Ubuntu)
Status: New => Triaged
** Changed in: update-notifier (Ubuntu)
Status: Triaged => Fix Released
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Error in string for translation
https://bugs.launchpad.net/bugs/401610
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