Hello,
in my CentOS-Base.repo file there is a line baseurl=http://mirror.centos.org/centos/$releasever/updates/$basearch and yum update said 'nothing to do'. Then I change this line to baseurl=http://mirror.centos.org/centos/5.1/updates/i386 and yum updates firefox, squid, sos and so on. That happens on two of my computers, reproducible.
Does yum sometimes forget it's release version?
regards Olaf