Unlike previous versions of Office, in Office 2007 Microsoft has made use of the Updates folder in the installation media. This will enable us to get a fully updated (or almost fully updated, depending on the level of updates that you keep) version of Office 2007, and will rid us from the need to use Windows/Office Update for these downloads.

Source: http://www.petri.co.il/slipstream-updates-for-office-2007.htm