As a translator, I have got CVS checkout of both HEAD source code (CVS module "moodle") and HEAD languages (module "lang"). I regularly run "cvs update" in both working copies and I sometimes do "cvs checkin" in my language pack.
But - if I have to upgrade my dev installation because of the version shift, the first step appears to be an automatic language pack update (TTW - thru the web). This tool probably removes my own CVS checkout and it downloads and unpack standard lang pack from moodle.org.
From my point of view, this is a bug. The tool should check, if the language pack is CVS working copy. If it is so, the automatic update should not proceed, maybe with notification to run "cvs update" in language directory.