I would never under any circumstances consider using a cursor for an update. Why? First, cursors are terribly expensive performance wise which may not be noticable at the time you are developing, but causes problems once there are lots of simultaneous users and many records. Second, even if I know that this particular situation will only loop through a few records, as Cheney says, this is the time to practice so that the set-based solution is the one you think of naturally thus avoiding efficiency sinks in your code later on because you are in a hurry and can't take the time to do something the correct way.
Looping through a cursor is only meant for those rare situations where you need to process one record at a time. Almost always these involve runnning some kind of system stored procedure and affecting meta data not the ordinary data in your database.