Yes, the cygwin-rsync release is very out of date.
That old patch contained some performance improvements and added the --checksum-seed option, both of which have been included upstream circa rsync 2.6.2. So the README file is out of date - there is no longer a diff file.
Cygwin actively discourages this type of minimal installation since having multiple cygwin1.dll files cause problems. It is strongly recommended, as Les suggests, that you install cygwin via its setup program, and install rsync. Or use cwrsync.
However, if there is real interest, and someone is prepared to build and test an up-to-date rsync and cygwin1.dll (with utilities), then I'll be happy to release it on SF.net.
Craig