Hmm.. I haven't chimed in on this yet. MS's web sites (and the ones that use its geographical image library) use primarily aerial photographs for their detailed pictures of a specific area. The aerial photographs have been build up in a data base by one of the companies Microsoft bought a couple of years ago. They're recently cut a deal to provide highly detailed pictures from OrbView if memory serves, which operates a high resoluton Earth observation satellite. MS's product differentiator is the "birds eye view" which is an overlay of oblique (at an angle) aerial photographs which have been comissioned for many urban areas in the US. Where they haven't been able to purchase space or aerial photography, they use older USGS aerial photography which may be up to a decade old.
Google Earth, their main competitor took a different tack. Rather than focusing on high precision pictures of US urban areas they bought images from Digital Globe which operates a high resolution commercial Earth observation satellite. GE has focused on a global-down GIS data base (Geographic Information System) and is slowly updating the GE GIS data base as higher precision photography from Digital Globe becomes available. It should be noted that Digital Globe sells images to a lot more people than Google, and as they take an order for a high resolution region on the Earth, they may not release it into the public domain through Google Earth for a while, since someone may want to hold exclusive rights to it for a while.
In both cases, if memory serves, the contracts allow OrbView and Digital Globe to hold their high resolution pictures out of the public domain for a while for commercial considerations, before they are released into their global GIS data bases. This is strictly a commercial consideration -- MS and Google would have to pay a lot more money to have first rights to release the data.
This also has helped them defuse a couple of law suits on "invasion of privacy" where people have tried to sue the companies for putting high resolution images of their houses or property on the internet. But if the images are a year or two old at least, there's not a lot of immediate loss of privacy for historical images.
In a very few cases, I know Google has covered over or fuzzed out specific locations for national security concerns -- for some time you could not see the roofs of some buildings around the White House, for example. That was to restrict some information about specific security operations, and most of those restrictions have been lifted from what I understand. Again, something that was in the pictures a year or so ago, is not necessarily what is there today.
But, its really economics that limit how often the images are updated on the free internet data bases. The satellites (or aerial photography on the same scale) are very expensive, so the companies look for a commercial dollar revenue generating user of the pictures for a while before they release them to the public on the internet.