When Ubuntu publishes a patch to packages, do they update the install media?
If I download a "live CD", will it be pre-patched?
What about SRU (stable release updates)?
The LiveCD images for an Ubuntu version which is still in beta/development get updated on a daily basis in its daily live images. For instance, you can get an up-to-date development version of upcoming Ubuntu 12.10 here.
The LiveCD for a version is not update once it is released as final. Then, updates are only pushed through the Update Manager.
For an LTS release, however, Canonical releases maintenance updates (like Windows Service Packs) periodically, which include patches released for the version. For instance, Ubuntu 10.04 is in its 4th maintenance update which can be downloaded here.
Generally, updates aren't patched into the install CD, but from 12.04 installers have the ability to download updates during installation from a mirror.