Update vs Upsert vs Insert - Explain the difference?

Update vs Upsert vs Insert

INSERT

Always use to create new records

  Support generic SObject type insert

Note:

  Must NOT have id in the Sobject instance

UPDATE:

  Always use to update the record

  Support generic Sobject type updates

Note:

  Must have ID in the Sobject instance

UPSERT

Always used in case when INSERT and UPSERT both. It is possible on Sobject depending on whether the ID is present in instance or not.
If ID is present it will UPDATE otherwise, INSERT
We can use External Id type to update the Sobject in case the instance doesn't have an ID in it.
Ex: upsert SObjectList External_Id__c

Note:

It does not support generic Sobject type. You will have to Specify the CustomObject.