An update can be considered as a customized package of development items; you know by now that any Service-Now customer gets three instances or environments: One production and two non production. So, all new requirement or development work is done on the development instances, and all end-user testing is done on the testing environment. Once everyone is happy, the code is deployed in the production environment, but remember that only configuration can be captured in the update set, not data. To read more about update sets, click on http://wiki.servicenow.com/index.php?title=Using_Update_Sets#gsc.tab=0.
To step through this recipe, you should have an active Service-Now instance, valid credentials, and an admin role.