Difference between SpListItem.SystemUpdate() and SpListItem.Update()

There are 2 ways by which the SpListItem data can be updated.

The below snippet is usually used to update SPListItems.
SpListItem.Update() :
The Item.Update() updates the database with the changes, creates a new version and changes the Modified and Modified By fields.

SPList list = web.Lists["myList"];
SPListItem item = list.Items[0]; // First item in the list
item["myField"] = “Test update”;

item.Update();
list.Update();


SpListItem.SystemUpdate() :

If you want to avoid version changes, Modified and Modified By fields from getting updated , Item.SystemUpdate() would be the right way to do it.
SPList list = web.Lists["myList"];
SPListItem item = list.Items[0];
item["myField"] = “Test update”;

item.SystemUpdate(false);
list.Update();

The argument false informs the SP object Model not increment versions.