retail fix refers to game version with no updates , after each update the eboot is changed (signed with new keys _ for the ones wich are on CFW 3.41 or 3.55) means that the eboot from the update pkg are signed with keys witch will not work with your CFW. Update fix means that after you have your game on console or HDD exterl, depends on situation and you want to install update 1.01 (that update fixes some issues for the game etc) you will need to install the fix, because the fix contains the files what will make your game to work like it should, nice and soft.
In 99,00% cases after you put a update pkg to your game (and the update is signed with key over 4.xx _ remember in this example you will be on CFW 3.55) the game will not work anymore. It will ask you to update your OFW to what he needs to run, let's say OFW 4.6.
PS : when you have fix for update 1.01 (not all the times you get the update link download, the link to the orig update is this : [Register or Login to view links]
Signed with 4.3 keys.
1. use retail fix
2. install the update 1.01 (linked above)
3. use the update fix