How often should I update my website?

I keep hearing that Google "loves" frequently updated sites. How frequent are we talking about? Should I update as soon as I see that Google has crawled the site (based on my webmaster tools info)?
In other words, does it just want to see an update every time it crawls, or should I make little changes daily?

That's going to depend on your time availability. Update as frequently as you can, weekly should be fine though.