What's in the update? For Microsoft Excel, it's a bug fix. According to Microsoft, the update "fixes issues that cause Excel to crash or close unexpectedly sometimes when you try to start an Excel application." And for those of you who use Entourage (Anyone? Anyone? Bueller?), it's about reliability. The update details there say that it fixes issues with Kerberos authentication with Microsoft Exchange Server 2003 and 2007 as well as an issue where Entourage would create duplicate items in the Exchange 2007 mailbox.
You can read all of the details here. The installed update takes up 503.4 MB of your precious hard disk space.