1) Latest from Symantec means the definitions avaialbe on the internet
2) Latest on Manager means the definitions which are currently loaded into the manager.
first one needs internet access so that it can go to web and look for latest one. However your manager might get definitions from liveupdate manager. If you are using proxy make sure to set it right under sepm-admin-servers tab.
whats the version of SEPM you are running, check this bug track
"Latest Manager Virus Definitions" on the SEPM Homepage are incorrect after replication
http://www.symantec.com/business/support/index?page=content&id=TECH183671