It's both. Originally Visual C++ binaries built for DLL-based C runtime relied on MSVCRT.DLL and that was installed by the redist. Starting with Visual Studio .NET 2002, separate CRT DLLs starting with MSVCR70.DLL were used. MSVCRT.DLL is now part of Windows to support parts of the OS itself and for compatibility with programs that still use it. I think some versions of MinGW also use MSVCRT.

Current versions of the OS ship with functions in MSVCRT.DLL that weren't in the last VC6 version, such as the updated C++ exception handler (__CxxFrameHandler4). AFAIK, there is no redistributable version of it, it's unique to the OS.