Deferred Revenue is Revenue which actually occurs in this quarter, but is recognized in different quarters for a variety of reasons. Companies such as MSFT use deferred revenue to smooth out variations in their business. Of course, it is illegal to do that, but smart accountants can always find ways around that.
If you look at ERP companies such as PSFT, ORCL, Baanf etc, they have significant deferred revenues. Legally, it is supposed to represent revenue which should be recognized later when the actual services are delivered. So if PSFT agrees to deliver a product and its upgrade a year later, the deferred revenue would represent the upgrade which is due a year later.
That's my understaanding. I am sure accountants can do much better that that. Good Luck.