JQuery, setTimeout not working

I'm still new to JQuery, on the way to getting my ajax example to work i got stalled with setTimeout. I have broken it down to to where it should add "." to the div every second.

The relevant code is in two files.

index.html

<html><head>
<script type='text/javascript' src='jquery.js'></script>
<script type='text/javascript' src='myCode.js'></script>
</head>
<body>
<div id='board'>Text</div>
</body>
</html>

and myCode.js

(function(){
   $(document).ready(function() {update();});

   function update() { 
      $("#board").append(".");
      setTimeout('update()', 1000);     }
 })();

the myCode.js file works alright and "update()" runs the first time through but never again.