Since the plugins are stored in /usr/share/eclipse/plugins/ a normal user does not have the permissions to add a new plugin and any plugin added is present for all users on that system. It should be possible for a normal user to install plugins specifically for their own use, probably by storing those plugins somewhere in their home directory.
Plug-ins can be added in arbitrary locations. At the end of the Update wizard you can add new install locations by clicking "Add Site..." on the "Install Location" screen and choosing (or creating) a local location which you have write access to.
Closing, update manager works fine