OE consists of two main parts: The OE python files which actually do the processing and issue the commands to get stuff built, and a packages directory which contains the instructions for how each file (applications, kernels, toolchains, etc. - everything) should be downloaded, processed, compiled, used and packaged, etc.
Both of these sections are available via bitkeeper and are constantly updated. If you were to download them today (via bitkeeper, or the snapshots) then did an 'oemake opie-image' you'd produce version 3.5.2-rc? of OZ (BTW a cross-toolchain would be compiled automatically from source).
Then you can do a 'bk pull' to update both the python files and the packages whenever you need to (before you do a build, so you have the lastest versions).
Any changes will cause any affected packages to be re-built automatically. If you use snapshots, you just delete the old oe and packages directories and place the new ones in their place.
Simon