But what you are missing is that they can't subvert the update process without changing Apple's codebase. Somehow they are getting the update process to look to them for updates rather than Apple. Think about it.
But do we know for a fact that they are, indeed, doing this? Psystar says they have their own "native Software Updater" that handles downloading updates to the operating system. Is this "native Software Updater" a hacked version of Apple's Software Update application, or is it a separate application that points to Psystar's own servers that holds the update? And if the latter, is that update an unmodified version of Apple's update?
One of my former employers used Altiris to deploy updates to Microsoft Windows. Microsoft releases their updates on a Tuesday via WSUS/Windows Update. Altiris releases these exact same updates via their own servers on a Thursday - two days later. Why? I suppose to see if Microsoft suddenly says "whoops! pull that update and use this one instead" within 48 hours of releasing it.
Now, is Altiris using Microsoft's WSUS/Windows Update code to offer this functionality? No they are not. They perform the upgrade through their own code. Now, Altiris might very well need (and obtained) permission from Microsoft to distribute these updates, but they are not using or modifying any MS intellectual property to do so.
The same
might be with Psystar.
That being said, Apple might have EULAs attached to their updates that limit it to being downloaded only from Apple-operated servers and/or via Software Update. In such a case, then Psystar would be violating that EULA, as well, even if they are not modifying Apple's Software Update source code.
Apple has many complaints about Psystar. The first and biggest one is copyright infringement for Psystar installing Leopard on a computer that is not Apple-labelled. That complaint would obviously go away if Psystar doesn't install Leopard.
Just installing Leopard unmodified on the machine is not a violation of copyright law since Apple has not sought and been granted a copyright that encompasses OS X on an Apple-branded computer. It may very well be impossible to be granted such a copyright, which is why Apple is forced to use an EULA to enforce such a pairing.
The argument Apple is putting forward - and this trial will discover - is that Psystar is making direct modifications and alterations to the OS X codebase, which would be a copyright violation.
OS X is sold separately, making it a separate product. It does not magically become an update just by Apple saying it it, does it?
Since Apple assumes that any machine is is being installed on an Apple-branded machine (since the EULA implicitly states this needs to be the case) and since no Apple Macintosh (or licensed clone) was ever sold without a copy of OS X pre-installed, they chose to forgo the check for the previous edition and implicitly allow you to install it on an Apple-branded machine that may not have any previous OS on it.
If (OS X) is an upgrade, then how is it possible for me to run it on a PC?
You can buy a Windows Vista Upgrade and install it on a machine with no operating system by installing it twice - it technically upgrades itself. However, Microsoft does not intend you to do it this way and has likely subsequently modified it's EULA to prohibit such action (assuming the original EULA did not already prohibit it).