While there is no way to selectively choose NOT to update an app (or make the update indicator go away) - there is a way to fool iTunes and the AppStore into thinking the app does not need updating. Please see my post (#28) in this thread:
http://www.ipadforums.net/user-news-submissions/45537-xsysinfo-3.html
I still use this method (am currently using the old version of the game "Dots - that new update just ruined the game for the iPad!). I use the one that you do on the computer cause that way it's already in iTunes; but the iFile method still works fine, also. Oh, and yes, you [still] don't have to be jail broken.
So, maybe this'll work for you?
Marilyn
* Edited for grammar and word fixes...