Upgrades and Patches have 2 status messages next to them :
MANDATORY - This means that you MUST upload these files to have a fully functioning store. This is for critical bug patches, security patches, and major improvements to function(s) or administration area feature(s) where no custom work could ever be overwritten (with a few rare exceptions in which case you would still need to upload them because it's highly unlikely that you have modified these files and since they are critical to the software's functionality and security, they MUST be uploaded for the safety of your store.
RECOMMENDED - This means that you SHOULD upload these files to have the most improved version of the software. The files included with these patches are for all improvements to function(s) or administration area feature(s) where no custom work could ever be overwritten. These files will generally have improved scripts of existing features and also will usually have new functions and features. Any features included in these patches will usually be the encrypted files to preserve any custom work, however it is important to note, that generally you won't need to modify most of the cart's files, there is no need to, generally speaking. So sometimes there will be some of the open source files in there, but never the customizable ones covered in the File Design Guide. So these patches may contain updates to files like processpayment.php, payment modules, bestsellers.php, etc, where they would rarely be changed by the end user (you), so you can upload them to improve your cart's functionality. You will be told (in a readme file in the main cart's directory) which files are open source and to check if you have modified one of the old files before uploading it. 99% of the time you should upload all of these files, but always all of the encrypted ones.