It refers to the idea that most asymmetric cryptosystems (which, generally speaking means that each user has a public key and a private key) allow for a user to create a 'signature' using their private key, which can be verified using their public key. See here:

http://stackoverflow.com/questions/454048/what-is-the-differ...

It means generating a signature of the binaries being installed, and having this signature be authenticated by Microsoft (using their signing key).

The signature is distributed alongside the binaries.

I'm not certain if the Windows Update system uses the same Autheticode system used for application binaries, but you can start reading here:

https://msdn.microsoft.com/en-us/library/ms537361%28v=vs.85%...

Think of it as a SHA-1 or an MD5 that is generated using a private key, and can be verified using the public key (and the content of the data that was signed).

It verifies that the signer had access to the private key, and that the data signed by the private key is the same data that you are verifying with the public key.

It's like the other checksums (SHA-1/MD5/etc) with the addition of identity verification (so long as you can trust that the private-public keypair used to sign it is only accessible to parties you trust).

It's a cryptographic mechanism. MS has a private key they apply to each Windows update to mathematically prove A) they're the ones who issued it and B) the content was not modified in transit.

(I am not experienced in cryptography. This explanation might be a little simplistic.)