Microsoft has document this well on the wiki but can be confusing for first time. Also, things are improving and sometimes hard to keep up.
This is what you see on LCS when updates are available.
This wiki page walks you through the steps for applying a Microsoft Dynamics AX deployable package on a Dynamics AX system. This package can be either a binary hotfix for Application Object Server (AOS) or a deployable package that was created in your development environment.
Apply a deployable package on a Dynamics AX system
The most misunderstood part is the application x++ updates. What you are downloading from LCS is the x++ code. You are not downloading a deployable packages. A deployable package is a compile output that you can use to install to your none development machines.