Large table updates

Hi all,
I have a table with 3mill records of which 500K need updating. If I run:
update fmstitm set dist = 't' where fmstitm.fitem = dist_its.fitem

does it update the entire table or one record at a time...

in other words I run
select count(*) from fmstitm where dist = 't';

as the update is running and i get o results. Is this normal? The update
is taking a long time 1+ hours so far.
I just want to check that something might be wrong without any results
returned by the count(*) query.

-Chris