Can an object script NOT contain Update()?

If I have a GameObject with three scripts attached to it, do all three scripts have to have an Update() function? Can 1, 2 or even all 3 have no Update() at all but just normal called functions, maybe that are called by another script attached to another GameObject?

And if so, does it make any difference? I read somewhere on another forum that for iPhone optimisation, it's better to have one function to affect a whole collection of objects, rather than each of those objects having its own little Update()...

No, none of the scripts on your GameObject have to include an Update() function.

The memory cost for ten Update()'s is really affected by what you do in it. Alone, it's minimal, so I wouldn't worry about it.