That is a great question! And to be honest, I didn't think to test it nor do I know the answer! I suspect the update trigger works fine only because while you can't access text/image in a standard trigger, you can access varchar(max) and related types, which makes me think that they've made the behind the scenes paging a bit more transparent to us. Here is the note about the varchar(max) in a trigger from BOL:

ntext, text, and image data types will be removed in a future version of Microsoft SQL Server. Avoid using these data types in new development work, and plan to modify applications that currently use them. Use nvarchar(max), varchar(max), and varbinary(max) instead. Both AFTER and INSTEAD OF triggers support varchar(MAX), nvarchar(MAX), and varbinary(MAX) data in the inserted and deleted tables.

With luck someone will have the answer and will post, if not I'll try to make time in the next week or so to do some testing and report back.