The 10.7.4 update is recommended for all servers currently running Lion Server. This update includes general operating system fixes that enhance the stability, compatibility, migration and security of your server and improvements of the following services and applications:

File Sharing
defining custom names for file share points
using Kerberos authentication
emptying trash when using a network mounted home directory
using WebDAV with third-party iOS clients
copying files and Finder information over SMB
general reliability of SMB file services
Profile Manager
enhanced payloads and management settings for iOS and OS X clients
reliability of device enrollments after changing server hostname
configuring VPN management settings
using profiles to join 802.1x networks
installing enterprise iOS applications
setting iCloud, Spotlight and Media Restrictions for OS X clients
Web Server
improved handling of URL redirects and alias matches
Mail Server
improved reliability of SMTP services
prevent overwriting of manually configured greylisted mail servers
The update also includes specific fixes for:
more flexible service data storage
reconfiguring DNS settings when changing hostnames
editing DNS expirations
archival and migration of Open Directory
preserving local accounts during upgrades
This update also includes all the changes included in the 10.7.3 update.
For detailed information on this update, please visit this website:
http://support.apple.com/kb/HT5168

For detailed information on security updates, please visit this website:
http://support.apple.com/kb/HT1222

System Requirements
OS X Lion 10.7 Server