How does an application launcher update itself?

Basically the launcher checks to see if there is a newer version of it self, and if so kicks off a task to get the new version and then executes it and then closes.

Given the updater app is small and loads up quick, you can have it detect, download, stick up a dialog to say there's a new version, and barely flicker as the old version closes and the new one runs up.

I've never tried, but this is what I would guess (assuming you can't overwrite a file being executed. If you can, this is all simpler)

Updater A checks if its the newest version
If launcher isnt the newest version
    Download the differences (to save bandwidth) to file B
    Apply the delta to own code into file C
    Launch file C.
    Close
If file C exists (update happened recently)
    Try to delete C  (update was previous launch, delete temporary file)
    If delete fails  (We are C, means A is out of date)
        Copy C over A  (update launcher)
        Note that you can keep going, dont have to restart even though we are C.
If game isnt newest version
    Download the differences (to save bandwidth) to file B
    Apply the delta to game into file D
    delete game
    Rename D -> game
Run game

André Caron has shown me that the swap trick is done better with transactional file IO.