UPDLOCK is used when you want to lock a row or rows during a select statement for a future update statement. The future update might be the very next statement in the transaction.
Other sessions can still see the data. They just cannot obtain locks that are incompatiable with the UPDLOCK and/or HOLDLOCK.
You use UPDLOCK when you wan to keep other sessions from changing the rows you have locked. It restricts their ability to update or delete locked rows.
You use HOLDLOCK when you want to keep other sessions from changing any of the data you are looking at. It restricts their ability to insert, update, or delete the rows you have locked. This allows you to run the query again and see the same results.