It would be nice if they added a few options, I would like to see a "don't notify me about updates" checkbox. If an app is working fine and not a security risk (much more likely on android), then I don't want it to bug me.
You already can, although it's not per application, it's all-or-nothing. The setting is located at Market->Downloads->Menu->Notifications (at least on T-Mobile's brand of Android 1.6 -- I think it was in a slightly different place on 1.5, but it was there somewhere.)