When faced with letting Firefox's autoupdate feature do an update to PortableFirefox, there are 3 fears:
1. Some of the extensions will stop working. Ok, this one is guaranteed. They tell you about it and even tell you which one. It doesn't matter that you are portable, it's a FFX thing.
2. Your install will be corrupted. One of the joys of portability and big drives is that you can drag a copy off somewhere and, if the original is munged, just bring the good copy back.
3. Your portable FFX will become a non-portable install. Well, I have just gone thru updating of both PFFX and PTB. In both cases, the mini-upgrade fails, the full upgrade succeeds. And while there are Mozilla, Firefox, and Thunderbird folders in Documents and Settings, all the folders are empty.
So, in my humble experience, it works just fine. YMMV
-----Paul-----