The patches are bug fixes and minor feature additions. Whether any of them are important to you depends on how you use Vim and which features you use.
Vim patches can be applied like patches are to any other program. The process is briefly described here.
However, Vim 7.3 is currently at patch level 762. That's a lot of patches to download and apply. A better way to keep your Vim up to date is to obtain the source from the Mercurial repository as described here. It's really easy to do; doesn't require any more knowledge of Mercurial than the three commands given on that page; and is easier and less error prone than using patches.
hg clone https://vim.googlecode.com/hg/ vim