As far as I understand the Linux System Administrators Guides NTP chapter, "continuous updates" doesn't mean that ntpd constantly queries its servers (like once a second), but that the time corrections do not introduce discontinuities.
Instead of just setting the correct time,
ntpd will run your computers clock slightly slower or faster until it reaches the correct time (assuming the error is not too big). This avoids problems with software running havoc because of gaps in time or negative durations -- most programmers won't expect a process to finish before it started and thereby giving a negative duration...
Furthermore, the manual states that ntpd also learns and compensates the drift of your computers clock (at least the constant part).
The Network Time Protocol Project has a nice FAQ (
http://www.ntp.org/ntpfaq/) explaining NTP and how it keeps the time.