This has been a longstanding question I've always wondered about but never could find a good answer for. It is one of those things that isn't terribly important until you are trying to figure out why a service pack or update fails to install.
CBS stands for "Component-Based Servicing" and it basically (as far as I've read) is the way components get installed and uninstalled during updates. It is the reason you see "Stage 1", "Stage 2", and "Stage 3" during the Service Pack 1 install. "Stage 2" and "Stage 3" exists for the registry keys and files that are normally locked during regular operation.
If you want to investigate the CBS, check out %windir%\Logs\CBS\ and the log files inside of it. You might have a file in there called "FilterList.log" that lists the various filter drivers that the setup program "saw" during install.
