Applications are a collection of files delivered as a bundle. In OS X, you can go into your Applications folder, right-click on anything, choose "Show Package Contents" and actually see the files. They usually include some code files (the actual programming), images used in the applications interface, sounds, fonts, or whatever else.
When a developer updates an application and you install the update on your computer, you're essentially replacing the entire bundle with the new version of the bundle. The new version might mean a simple bug fix (like, a slight change in one of the programming files) or a dramatic increase in files (like the addition of 100 new stock photographs). In any case, the total size of the application on your hard disk after the update is complete should equal the total size of only the newest version of the bundle. (As Gav2k mentioned, the system is capable of doing some clever things like noticing only which portions of the app have actually changed, and only using the bandwidth necessary to download those when you install an update.)
It's tough to guess whether "most" of application updates involve added resources – I'd guess not, since so many updates are quick maintenance updates. You can probably infer about this by reading the description of the latest version for that app (e.g. "this update contains several bug fixes").
I think you might be asking how that size is described when you're inspecting it in the App Store, and that I'm not sure about.