Keep in mind Falnor may not have a HDD or something, and therefore I would imagine that yes, you can only keep so much in your cache or else you wouldn't even have enough for saved games on a 256MB card or whatever. If you have a full HDD, I don't know why they system cache would only be like 10-15MB (only enough to store like 4 or 5 updates), there may also be a setting I've not explored to change your cache size. That said, yeah I've gone back and played old games that required an update to begin with (every game I've played had an update at some point), I've never had it redownload a patch or tell me there was an update available despite the game coming out 2 years ago, and I have an Arcade with a 4GB USB stick in it, as well as a 256MB and I think a 512MB memory card in it (man I'm glad Microsoft started allowing USB sticks to be used as memory, $30 for a 512MB card when you can buy a 16GB flash drive for the same price is ridiculous).
It wasn't me who said 5 updates.
I do have a hard drive but then again I do have around 140 games so maybe that's why I sometimes have to redownload a patch.
I just read the post by Gstaff earlier in the thread about a number of games getting patches since the Kinnect thing. Maybe that's why it redownloaded a couple of patches in a short space of time making me think the limit was less than 30.
Anyway shouldn't matter soon for new games because it seems patches can now be stored to the actual memory where the saves are instead of the cache. The title update for blackops, sky player, zune are now stored in the memory section with the saves.
Hopefully the new new vegas patch will be like this so that anyone without an internet connection can transfer the patch to their console with a USB stick.