If you want to create a smaller and faster to combine "rpm-only" deltarpm which does not work with filesystem data, specify the -r option.
makedeltarpm normally produces a V3 format deltarpm, use the -V option to specify a different version if desired. The -z option can be used to specify a different compression method, the default is to use the same compression method as used in the new rpm.
The -s option makes makedeltarpm write out the sequence id to the specified file seqfile.
If you also use patch rpms you should use the -p option to specify the rpm-print of oldrpm and the created patch rpm. This option tells makedeltarpm to exclude the files that were not included in the patch rpm but are not byteswise identical to the ones in oldrpm.
makedeltarpm can also create an "identity" deltarpm by adding the -u switch. In this case only one rpm has to be specified. An identity deltarpm can be useful to just replace the signature header of a rpm or to reconstruct a rpm from the filesystem.