Downloading and unpacking the updates (yum process). This won't change anything right now, because your current updated programs are likely running in memory (Xen, Linux, XAPI…) so only a reboot will make things changed: it's the current update button on the pool view.
Evacuating the host, rebooting it to get all the new versions, and migrate back VMs to it (starting by the master)
Right now, 1. need to be triggered manually (you must do it otherwise it won't happen: bad if you forgot) but everything else is managed at all hosts of the pool at the same time (good).
And 2 is entirely manual.