Yep, the redist package(Mar 2009 being the latest) will update both DX10/DX9 in vista and only DX9 in xp(as Q mentioned). If you want to see what updates it contains, unpacking it(using winrar etc) will show the contents.
Windows 7(beta) has DX11(and some degree of backwards compatibility), but I havent gotten around to testing KOTOR in it yet
mtfbwya