Microsoft® Office 2003 service packs and product updates are designed to help improve the security, performance, and reliability of Office applications. A service pack, such as Office 2003 Service Pack 1 (SP1), typically updates the entire Office package and represents a new baseline version of the product.

Between service packs, Microsoft may also offer product updates developed in response to emerging issues such as virus attacks or bug fixes. These interim product updates, which typically update specific applications or features, require the most recent baseline version of the product. Interim updates are also cumulative; for example, you can apply the fifth Microsoft Office Word 2003 patch without applying Word 2003 patches one through four.

The strategy you choose for updating Office on users' computers depends on several factors:

• Deployment method
  The method you use to deploy Office 2003 in the first place determines your options for updating clients later on. If you want to be able to distribute binary patches throughout your organization, deploy Office from a compressed CD image and take advantage of the local installation source, which Setup creates by default on users' computers.
• Management practices
  If your organization maintains strong centralized control over software deployment — for example, if you use Microsoft Systems Management Server to help control software distribution — you can more reliably keep clients synchronized with an updated administrative installation point. However, Microsoft still recommends that you maintain the original administrative image and deploy binary or full-file updates to users.
• Network capacity
  Recaching and reinstalling Office from an updated administrative image requires considerably more network bandwidth than distributing updates to users, and distributing full-file updates requires more bandwidth than distributing smaller binary patches.
• Client hard disk capacity
  Caching all installation files on the local computer requires approximately 240 MB of hard disk space in addition to the space required by a typical installation of Office 2003.

Other tasks:

To use the OHotFix utility to chain client patches
To use Windows Installer to chain client patches
Patching an administrative installation point
Synchronizing independently updated client computers

More: http://office.microsoft.com/en-us/assistance/HA011402381033.aspx