If an application changes its permissions, the Android market will generally mark it for manual update. Is this true if the change is only to remove a permission that was p
EDIT
I tried it out today. Removed a permission from the app and put it up on the market. I had also ticked the 'auto update' feature in the mkt page. Although it did not automatically update the app, it did not say 'manual update' in the mkt page.
Removing permissions does not prevent auto-upgrades.
Adding a permission might prevent auto-upgrade, but not all permissions do. A good heuristic is to look at the protectionLevel of the permission; "dangerous" permissions will prevent auto upgrade, "normal" in general will not, but it's good to test with a small test bench app.
Third-party permissions are typically "normal" or "signed", and "signed" are treated same as "normal" with regards to auto upgrade.
Also, as of v4.1.6 Google Play app does show apps that require manual acceptance of new permissions in a separate "Manual Update" section. They are listed along all other updates, and the GP app will just show the new permissions dialog when user tries to update them.