There are two different "magnitudes" of upgrades. There are major upgrades and minor updates. A major upgrade updates Drupal from one major version (say, Drupal 6) to a newer one (Drupal 7). Because major Drupal versions indicate substantial changes, such upgrades are often time consuming, requiring many steps both before and after the actual installation of the software. We are not going to cover such upgrades.
Minor updates move from one point release to another newer point release. A point release is a software update that contains only bug fixes and minor feature changes. Its major version number remains the same, but its minor version (its point number) is incremented.
Drupal's current major version number is 7, and its minor version number (as of time of writing) is 12, so we have version 7.12.
Updating minor releases is much simpler than major upgrades, and should also be done regularly. Since most minor versions are released for security or stability reasons, they...