I have heard about notifications sometimes working and sometimes not. My users tell me they are NOT notified when I update my application but that when they view their "My Downloads" from the Market application on their phone, it shows "Update Available" next to the application. If they do not go into "My Downloads" they never know an update is available.
"Or should I be writing code in my apps to stop working after a fixed
period thus forcing the user to download the new version?"
I would not recommend this unless the application will no longer work w/o the update. The Android Market is so fickle that sometimes applications dissapear from "My Downloads" when a carrier updates their system software on your user's phone. If that happens and your application expires your users will not be able to access the application until Google fixes the problem which can take a week or more.