CWM v184.108.40.206 has option to "Install from zip file" the following menu allows you to select from internal or external. When making a backup it also allows you to choose internal or external as a save source. The two Modified recoveries are used on DX2 and Xoom. Rogue Recovery 1.2 and Tenfar. So perhaps its not a Stock recovery, but a modified one. I imagine, though do not know, this is a similar case for current Nexus that does not have SD, and any other device without an SD, or that have Devs that created a modified recovery.
edit: For DX2 the option is still "Install zip from SDCARD" but the following menu includes "choose zip from sdcard" and "choose zip from internal sdcard", as well as three other options to install update.zip, and toggle script asserts and signature verification.
Last edited by NewAge; 11-01-2011 at 09:47 AM.