Background Information
The software development lifecycle is never complete. While it's nice to believe that once a software application is released to the market place that it functions perfectly, it is almost never the case. By the time a new Microsoft product hits the streets, Microsoft is already tracking lots of bugs and more surface as the public puts each application through its paces. Even before a product has made it through a release cycle, the typical software company starts planning and developing it's next service release. Microsoft very aggressively pursues critical bugs and fixes and the Office team has recently adopted a new service release model that accelerates the release of software fixes to the community, but it makes things a bit more confusing for the end user.
Resolution
Understanding the release cycle is relatively simple once you know the lingo, but tracking down the latest updates, or updates specific to your problem remains a challenge when sifting through the enormity of Microsoft's knowledgebase. To help you with this there are sites like this one and oodles of blog offerings by both Microsoft employees and non-employees like MVPs and other PM fanatics. It does help to know what you're looking for so here are some definitions to guide your search:
RTM Code: The code build (aka gold drop) that was "Released to Manufacturing." In other words, this is the build Microsoft sends to the CD/DVD replicators for the box product package and is typically posted for MSDN subscribers for download well in advance of the box product street date.
Private QFE or Hot Fix: As bugs are reported, a team within each product group continually triages and fixes these problems. There are two basic flavors of Hot Fixes; private and public. Private hot fixes are those provided to specific customers to address specific problems. These are not cumulative releases and contain only the code necessary to correct a specific problem. Corrections included in private hot fixes may or may not be included in subsequent public hot fixes as they may or may not be relevant to all situations. Microsoft does not publish KB articles for private hot fixes, although you may hear about them from peers in the public news groups or from a certified Partner with the EPM specialty.
Public QFE or Hot Fix: Public hot fixes are hot fix packages that are released on an as-ready basis rather than on a specific release schedule. These are deemed important enough to make available as soon as possible. Public hot fixes are not fully regression tested and, therefore, pose some risk to the target system.
Cumulative Update: The Office group recently adopted the software update model used by Exchange and SQL Server to speed delivery of critical updates to customers. Now, on a regular two month cycle, the Office team, including Project and Project Server, release Cumulative Update packages. CUs contain all of the public hot fixes previously issued since the last Service Pack. CU packages have undergone more rigorous testing than hot fixes, however these are not fully regression tested as are service packs, so they pose some risk to the target system.
Infrastructure Update: Whereas hot fixes and cumulative updates contain bug fixes, they do not change the underlying software functionality. An Infrastructure Update may contain some fixes, but these also contain substantive structural changes to the software that impacts the system beyond break/fix solutions. Infrastructure updates are one-off in nature and may not occur during a product release lifecycle.
Considerations: Some updates or fixes require both Server and Client updates to complete. Some updates, like the IU for Project Server, are dependent on updates applied first to WSS or MOSS if applicable. It is very important to make sure that you are aware of these dependencies before proceeding with your update process. Be certain to read all applicable documentation before you apply updates to your system.