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As best I know I am, yes- I see relatively frequent "System Update" notifications and apply them whenever I get them.

Check to see if you are on the 1.0.1 or the 1.1 channel. 1.1 is a lot better and has been getting very stable over the last month.

So you don't need to build a new Firefox OS release on your PC and flash it, the phone will just update itself?

Firefox OS includes over the air updates. You can also build your own and flash it if you want.