I updated with Mandrake using urmpi --update --auto-select and it downloaded a whole bunch of stuff
The updates for Mandrake usually don't upgrade the software on your system to new versions, they just provide packages of the same version as what you have before with bug/security fixes backported from the latest version. So in other words after running that command you have KDE 3.4 with any important security or bugfixes that have been discovered since Mandriva released 2006. This is the same way that Debian, Suse, Fedora, RHEL etc. do it.
If you want the latest version of software you can either find a 3rd party who packages it for Mandriva or join the Mandrivaclub where they release updated packages every 2 months to club members, the latest had OpenOffice2, KDE 3.5 and GNOME 2.12 I think.
If you want to see whats installed on your system goto menu->System->Configuration->Packaging->Remove Software.