Update Ramdisk
The Update Ramdisk provides the same basic functions as the Restore Ramdisk, without wiping out the NAND. The Update Ramdisk updates the operating system, and fixes any corrupt file/disk permissions. With this method, you keep all of your data, including but not limited to: App data, music, contacts (if not synchronized with MobileMe/iCloud,) and photos.
Beware, if you update (not restore+update) whilst being jailbroken, you will lose your jailbreak. If you are jailbroken, you can do one of two things. You can, A) not update, which is better for you and your jailbreak anyhow, or B) Use the "restore+update" method whereby you restore to the latest firmware instead of updating.