Every "point update" to Mac OS X requires that you purchase the new operating system.
For example, you purchase 10.3. Updates to 10.3 are free, and incrementally change the version number to 10.3.1, 10.3.2, etc. 10.3.9 is as high as you can go, because that's the last update Apple released for that operating system.
10.3's successor is 10.4, and is not a free upgrade. You must purchase and install 10.4 in order to be able to upgrade to 10.4.11.
Similarly, 10.5 is not a free upgrade to 10.4, and must also be purchased.
You don't have to upgrade sequentially -- you can go straight from 10.3 to 10.5 if you like, since every "point update" is really just an entirely new operating system.