Titi and I just tested... I had the old munchy version already installed. There was ~/.megaglest/techs/munchy.7z dated 2011-03-26 and there were references to 'aliens' and 'monsters' factions in ~/.megaglest/Cache - both dated 2011-04-03.
1. On this Ubuntu 10.10, I did _not_ have the 'p7zip-full' package (which provides /usr/bin/7z) installed (only the 'p7zip' package which provides /usr/bin/7zr and /usr/bin/p7zip only) but did not get a warning about this on GUI, just "sh: 7z: not found" on standard or standard error output (not sure which).
2. So I installed p7zip-full. I still had the old 'munchy' faction (as downloaded via in-game mod menu). The "sh: 7z: not found" console message no longer appeared but the game did not realise that a munchy update was available. When I tried to "install" it said "You already have the tech: munchy installed." While this was true, it should have offered me to upgrade since my version was clearly outdated.
3. I then chose to "Remove" (munchy) and so it changed color. Then I selected to "Install" (munchy) and the download progress bar appeared but remained at 0%. And indeed no data was flowing. Looking at ~/.megaglest/techs/ I still had munchy.7z there, still dated 2011-03-26. After deleting this file manually, I could download + install munchy in-game again.