I don't know if AJAX updating is good for this, since there are multiple options that can be ticked. Sure users can only choose 1 notification type, but I believe there are up to 5 extra stackable options (depending on the page being subscribed) that can be applied in addition to that, which modify the content of the notification emails the user receives.
We can certainly do away with the extra drop-down though, and just use radio buttons.