Views (the list of data you see when clicking a major tab like: Contacts) can be sorted by nearly all of the column choices. Displaying and Sorting by Last Update Date (Sort Decreasing values) gives you a quick list of the most recently updated Records.
A Record is updated if a field has been updated, if a Call was logged or scheduled, or if an Email was sent.
Additionally the Update Date can also be reset if an Appointment, Task or Note is logged. But, the Administrator must set parameter for updates for that to happen. Admin > General UI > Update TimeStamp...
See how to control the Last Update Date triggers