Update vs. SystemUpdate for SharePoint List Item

What is the general approach we follow when we try to add / edit a SPListItem using the SharePoint object model? Yes I know it! Almost everybody will have a common answer to this (which is something similar to what is provided below).

SPListItem item = SPList.Items.Add();

item["Column1"] = "value for column 1";

item["Column2"] = "value for column 2";

item.Update();

The last line in the code above "item.Update()" does the final task of updating all the assigned value for that specific item within the SPList.

But is this the only way to update an item? No, we can also update the same item using

item.SystemUpdate();

Thanks,
Bijayani
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