I have confirmed this.  Once an update that needs restart is installed
it turns the "off" button red signaling a reboot is ready even if other
updates are still being installed.

My system info used in test......

Linux 2.6.35-22-generic #33-Ubuntu SMP i686 GNU/Linux
Discriptor ID:  Ubuntu
Description:    Ubuntu 10.10
Release:        10.10
Codename:    maverick


** Changed in: update-manager (Ubuntu)
       Status: New => Confirmed

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"Restart to complete update" should not be signaled until the update is still 
running
https://bugs.launchpad.net/bugs/638744
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