Information is a bit murky, but it looks like there could be a problem with the recently released ChevronWP7.Updater that was posted a few days ago by Chris Walsh. The updater as of now has been pulled offline with no explanation given. Based on Microsoft's own tools for fixing NoDo installation errors, Walsh was able to modify it so that it forced a NoDo update for any device queued for the ROM upgrade without any "hacking" to the phone itself.

Adding fire to the mix is a report, unconfirmed, from the::unwired who said this:

According to Microsoft, the use of ChevronWP7.Updater could possibly put the updated Windows Phone 7 device into a state where it cannot receive future regular updates to the OS anymore and the only fix will be re-flashing the device with an original stock ROM. At the end of the day if could mean that such Windows Phone 7 devices have to be send to the manufacturers or carriers service centers because unlike for Windows Mobile, stock ROMs are officially not available as a public download for end-users.

However, before we all start panicking, the man himself, Chris Walsh, has chimed in on Twitter saying "Don't believe everything you read" in response from numerous people mentioning the potential issues.

Pure speculation here, but we imagine Microsoft asked Walsh to pull the update till they could test all the ramifications of the hack. In the process, some premature dire warnings made it out to the 'net without 100% confidence behind them e.g. better to be cautious than not. In short, if you haven't done this update yet, your best bet is to wait a few days for the dust to settle as we're sure Walsh and Microsoft will have something to announce on the matter when something definitive can be said.

Source: the:unwired, My Coding Adventures, Twitter 1, Twitter 2