The update applies only to the iPod shuffle and updates its firmware to version 1.1.3, the update is around 37MB.
Apple describes the update as "bug fixes", although Apple have obviously declined to comment on the exact details it appears that the update fixes problems related to the iPod shuffle green and orange error lights causing iTunes to suddenly no longer recognise the device. The issue has been known to affect both 1GB and 512MB iPod shuffles