Thats the full download of Mountain Lion as if you were doing a new install, for some reason it is showing on the update screen. If you wait for it to finish checking for updates or click check for updates again the actual update should appear in a separate box at the top.
The problem is that the full download is still showing up as an update after I install 10.8.1...so now the App Store has a constant 1 in the corner and is saying that I need to update the OS by installing the entire thing.
That kinda defeats the purpose of having small footprint updates and in using the App Store to update the system.