FreeBSD is run by a group of core developers (called, strangely enough, core) who make major decisions. around them there is a larger group of committers (meaning people who have commit access to the CVS tree) who do most of the day to day development. around them is a community of users and developers who test, find bugs, fix bugs, and generally bitch a lot on mailing lists. most of you probably fall into the later category. if you know a little about how the FreeBSD development process works, you'll be much less annoying when you bitch on the mailing lists.
there are several versions of FreeBSD out there in the world at any given time. first, there's the CURRENT branch, which is the bleeding edge unstable version where all the neat development gets done. this is not intended for use by non developers, but if you can handle the instability, it's there. second, there's the various RELEASE versions, which are the versions that get stamped on CD's and sold to the world. RELEASES are basically snapshots of yet another version, the STABLE tree. this might sound complicated, but it's not, you're just dumb. at any point in time there are at least two development branches of FreeBSD (at the moment there is 5.0-CURRENT and 4.1-STABLE). most of the development is done in -CURRENT, and when things have been shown to be relatively stable, they are merged back to -STABLE (often to several -STABLE's if they're security fixes... nowadays both 4.1-STABLE and 3.5.1-STABLE are getting fixes committed to them when possible). this is called an MFC (merge from current, not microsoft foundation classes) and now that you know that you're one step ahead of all the clueless newbies who see MFC in the cvs logs and wonder what it means. from time to time (about every 6 months i believe) -STABLE is frozen, and made as stable as possible and a RELEASE is made from it. this is generally what most people install.
so what's the point of having this STABLE branch if most people only install the RELEASE versions? the point is that since FreeBSD uses CVS, you can use a neat program called cvsup to update your local source to whatever version you want (either STABLE if you're running a production server and just want the latest bugfixes, or CURRENT if you're a developer working on the latest and greatest stuff). the build system is structured such that it's really easy to download the new source, rebuild everything, and reboot with a whole new version of the OS. this process is called doing a make world.
"so how do i do this?" you're asking yourself...
more info on rebuilding the world from source is available in, you guessed it, the FreeBSD handbook