In SQL 2000 when you run sp_updatestats it's the equivalent of running UPDATE STATISTICS on each table, forcing the update of statistics - either proactively or as a cross your fingers maybe it will fix the problem approach (the latter not recommended). In SQL 2005 the behavior changed, very quietly. The new behavior only updates statistics that need updating, meaning they've crossed whatever boundary (500 changes, 20% changes) where stats would usually fire.

Lots of people still have sp_updatestats in a job, but now they need either a loop of their own to call UPDATE STATISTICS, or use the task in the maintainence plans that do the equivalent. In the interim they may wonder why performance isn't quite as good as it used to be.

Not sure why the change, I suspect that they thought too many people ran in with fingers crossed and just decided to alter the behavior.