Ah i'm wrong but i'm still not quite sure how it works.
We are in the Namecoin goldrush period, so the cost of a domain goes down every few blocks. The price as I write this (at block 10,000) is 22.24 Namecoins. The cost will be 1 Namecoin at block 46,900. The cost will be 0.01 Namecoin at block 96,431. Then the goldrush is over, and the price for a name_firstupdate remains at 0.01 Namecoins.
See:
http://dot-bit.org/tools/domainCost.php