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The iPhone's iOS has a codependent relationship with iTunes as they both work together to integrate, back up, and create a framework for the content on your iPhone. You will often purchase music through iTunes on your computer, apps from the App Store, and even the iOS updates that come periodically. iTunes itself is not a static program and iTunes updates are released quite often, which means that you are asked to download and install iTunes updates. The iTunes 10 update was a major one that provided new features and even a new graphical image to characterize the software, but smaller iTunes updates are consistently released as well. The iTunes 10.0.1 update is one of the most recent ones and builds on the iTunes 10 update, but provides even more specific advantages to that framework. Here is a step by step tutorial for how to download and install the iTunes 10.0.1 update, as well as what you will get with the iTunes 10.0.1 update.
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Downloading and Installing the iTunes 10.0.1 Update
You will likely be prompted for the iTunes 10.0.1 update when you first engage iTunes with something, such as plugging in and syncing your iPhone. You can just initiate the iTunes 10.0.1 update right then, or you can do it manually. When iTunes is open just go and select the iTunes prompt in the upper task bar, and then select Check for Updates from the list. A prompt will then come up asking if you want to download and install the iTunes 10.0.1 update.
This will begin the Software Update process and it will start by checking for and identifying the exact software update that you want. This may actually show multiple software updates that are not just the iTunes 10.0.1 update if you have other updates waiting on your Mac, and you can choose to keep them all checked or to jus t check your iTunes update.
Once you have iTunes checked and are ready to go hit the Install button, which will say 'Install 1 Item' if you are just installing the iTunes 10.0.1 update. You will be asked to log in with your administration password if you have that set, and once you do the iTunes download will begin. You can watch this as it happens in the progress bar and it will tell you the percentage at a time.
At a certain point in this process you will be prompted to close out iTunes to complete the iTunes 10.0.1 update installation. When it has finished it will let you know and then re-open iTunes, updating the library and initiating a sync of your iPhone if it is plugged in.
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Why Update iTunes?
What is different about the iTunes 10 update and a more minor update like the iTunes 10.0.1 is that the single number updates are going to be more broad and affect the iTunes use on a more critical level. iTunes 10.0.1 is actually designed to fix bugs with Mobile Me accounts that have had problems, and this may not actually affect all users directly. It is still usually important to keep up on your iTunes updates even if this does not affect you directly.