Improvements are a type of Upgrade cards that can be installed in available slots in the Below Deck area of a player's Ship Board.
Improvements have different functions, and may have spaces marked on them; there are three types of such space: crew effect spaces (also called "circular" effect spaces), square effect spaces and rectangular effect spaces. Crew effect spaces require a Crew member mini placed there to trigger an effect. Square effect spaces contain some ship bonus value, for Improvements with such effects. Rectangular effect spaces can have other things than Crew members, such as enemy minis, placed in them.
Upgrade
Upgrades come in two forms: Improvement cards and Artillery cards. Both types can be bought and installed on your Ship Board via the IMPROVE action when you Visit a Port.
When installing an Upgrade, place it in the appropriate slot on your Ship Board. Upgrades of the Improvement type are installed in slots in the Below Deck, while Upgrades of the Artillery type are installed in one of three special slots marked as being on the Port side, Bow/Stern or Starboard.
If the only slot(s) the Upgrade can fit in are taken, you can discard an older Upgrade to make room for the new one.
Upgrades can sometimes be gained in other ways as well; for example by lucky Fate Die rolls on the Spoils table when Looting a Shipwreck. In these cases, they are usually acquired as Schematics, and need to be installed (usually via the INSTALL Service action when you Visit a Port) before they can be used.