The updates may come through Motorola, but if there are no modifications to the ROM then you would be getting the updates as Moto received them from Google.
As for Motonav being installed, Motorola can surely pre-install any apps they want without changing the ROM, thus it's not really a "Motorola" phone, but a "Google" phone with motorola's apps pre-installed.
Compare it to the problems we had with Rogers and the HTC phones. Rogers had HTC customize the actual ROM, which meant that any update to the OS by Google would likewise need to be customized before being given to us. Since this costs them time and money, there is little to no incentive to do it.
If the Milestone's ROM has not been customized, then Motorola can just pass along the OS updates from Google without having to make any changes.
That's also what T-Mobile has done with the HTC phones. The G1 and MyTouch say "With Google" on them, and HTC refers to them as "google-experience" phones. When those US phones were updated to 1.6 (including the 911 bug fix) it was delivered by T-Mobile and HTC, not by Google, though it was a matter of passing along the update from Google. A T-Mobile rep made it clear in their forums that the update was coming from T-Mobile with the help of _HTC_. HTC used this "google-experience" difference as an excuse for not updating the Rogers HTC phones.