How To Apply a Patch to Source Code

Learn by example:
Get a sourcecode package and a .diff.gz file and patch the source. The package is sane-backends_1.0.19.orig.tar.gz and the patch sane-backends_1.0.19-23ubuntu7.diff.gz:

cd ~/Downloads/
wget https://launchpad.net/ubuntu/jaunty/+source/sane-backends/1.0.19-23ubuntu7/+files/sane-backends_1.0.19.orig.tar.gz
tar -xf sane-backends_1.0.19.orig.tar.gz
wget https://launchpad.net/ubuntu/jaunty/+source/sane-backends/1.0.19-23ubuntu7/+files/sane-backends_1.0.19-23ubuntu7.diff.gz
gunzip sane-backends_1.0.19-23ubuntu7.diff.gz
cd sane-backends-1.0.19/
patch -p1 < ../sane-backends_1.0.19-23ubuntu7.diff

An important parameter of patch is -p. It can be used if you apply a patch in a subdirectory of the directory where it has been created. For more information have a look at the man page: man patch.