Nice plugin Sarah, but I wouldn't recommend using user levels. Those have been deprecated since like WordPress 2.3.
I'd recommend this bit of code instead:
add_action( 'admin_init', 'hide_update_reminder' );
function hide_update_reminder() {
if ( !current_user_can('manage_options') )
remove_action( 'admin_notices', 'update_nag', 3 );
}
That's all that's needed for your plugin. :)
("admin_init" may be too early though for my code. If it is, use "admin_head".)