The AutoUpgrade setting is one of the AppSettings that is contained in the web.config file.

By default AutoUpgrade is set to true. What this means, is that if you perform a Upgrading DotNetNuke, after copying the files from the UPGRADE package of DNN, the next time someone makes a request to your website the Upgrade process will fire off, and DNN will perform the upgrade.

A better way to handle upgrades is to set AutoUpgrade="False" this will cause the upgrade scripts to not run until someone calls the upgrade URL, the URL would be something similar to

http://www.dotnetnukedemo.com/install/install.aspx?mode=upgrade

All other requests that get handled by DotNetNuke would be redirected to the following url, at least until the upgrade process has executed.

http://www.dotnetnukedemo.com/install/underconstruction.html

The benefit of this approach is that as an Administrator you can almost guarantee that you see the upgrade scripts run, with it set to TRUE you would only see the upgrade scripts if you were the first person to hit the website after the files were copied over.