Where is Auto Update? I am attempting to update my craft instance from Craft CMS 2.6.2781 to the latest. (Critical Update).

Unlike before where there was a button that would do everything for me nicely and automatically, this update just downloads a zip file.

Is it possible to auto update this fix? If not are there instructions on what to do for this update? The readme.txt has pretty generic instructions.

Thanks
When the folks at Craft cut a release they can tag an update in one of several ways:


One-click Update
Manual Update


They can also tag their updates with a level of importance:


Normal Update
Critical Update


This helps Craft manage several scenarios that might occur that they need to account for during a release. When you see the "Manual Download" button it probably means that something changed in the code that could fail if an auto-update were performed or that they need to make sure everybody updates to that particular release before updating to any releases beyond that.

In this case, I believe the two things you have identified are from different releases. The Critical Update flag relates to release 2.6.2791 and makes the update badge in the Craft CP red, to indicate its importance. And the Manual Update flag relates to release 2.6.2922 where one of the bugs fixed related to the updater functionality itself, and they needed to trigger a manual download to make sure the files got updated properly.

A longer discussion of Critical Updates is available in this Straight Up Hangout: 


Critical Updates and Craft CMS