Marking as confirmed.  Seems that the bug is present on a fresh install
of 11.04 1/31/11 daily build.  Running update-manager as sudo seems to
solve the issue and allow an upgrade.  (Probably because it goes around
policykit)  After performing a current update and rebooting the problem
appears solved.  You can then launch update-manager from the application
menu as normal.

To initially get past the bug and perform an update use the command:

gksudo update-manager & exit


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

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https://bugs.launchpad.net/bugs/704667

Title:
  update-manager crashed with NotAuthorizedError in _run():
  org.freedesktop.PolicyKit.Error.NotAuthorized: ('system-bus-name',
  {'name':  ':1.107'}): org.debian.apt.upgrade-packages

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