Manual upgrade should work. Be advised that the part of the upgrade that flashes the other slice can take a LONG time (6+ minutes for a 4GB card), so don't panic if you don't see any activity for a while. If you have a serial connection available, you can:
tail -f /cf/conf/upgrade_log.txt
...before you upload the new firmware to the router and watch the whole process, including the reboot of the newly flashed slice.
I haven't heard anything from the developers about plans to fix auto update on nanobsd. I'm just grateful there's at least some
way to upgrade my ALIX that doesn't require a screwdriver.