Unfortunately it seems like more companies are going with the internet activation route that Microsoft made so widely popular via Windows XP. I always hated that because you are forcing people to have an internet connection. Although more and more people do have internet connection, I wish they wouldnt relying on this technology to do things.
It was the only reason I didn't buy Half Life 2 (even though I loved Half Life 1), nor did I go with any of the premium module from Bioware Neverwinter Nights.
Ironically, one of the reason I brought GalCiv2 was because that it didn't have to have the CD to play due to not having any copy protection (as well as hearing it was a great 4X game), but I was still dissapointed that it needed an internet connection for activation.
Edit: It is possible to update as long as you have a serial number, which you will have if you brought the game.