Sounds like you might have an update pending to install or finish downloading? Also, are you sure those are the right options? Aren't you confusing them with the options to AutoUpdate apps (not system updates)?
I know, I've just never seen the AutoUpdate or WiFi option for system updates, just for apps (that's why I thought you might be confusing them), but then again, I've never owned an AT&T-tinkered phone, so...