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How to Upgrade Wordpress - Made Easy
How to Upgrade your Wordpress Blog or Website
Wordpress frequently comes out with updates to their platform and when you log in to your control panel, the following notice at the top of the Dashboard will be a familiar site. This is a very basic and simple Hub on the steps required to update your version of Wordpress.
When you click on the Please update Now link, you will be lead through a series of simple steps to upgrade Wordpress to the newest version. At the top of the Wordpress Update screen you will see a reminder about backing up your database and files. The steps on How to Backup Wordpress was covered in another hub.
Also check whatever notices are available about your Plugins and Themes. If there is a notification there about your theme or plugins being out of date, you should update those before moving ahead with the update or things could get whacky when you update.
From the Wordpress Codex on Updating:
WARNING: The upgrade process will affect all files and folders included in the main WordPress installation. This includes all the core files used to run WordPress, two plugins (Akismet and Hello Dolly) and one theme (Twenty Ten). If you have made any modifications to those files, your changes will be lost.
So, if you have made code modifications to any of the core files, be aware that any updates will overwrite them.
Once you've completed your backups and confirmed that your theme and plugins are up-to-date, the rest is easy! Click on the "Update Automatically" button and let it run...
When it's completed you will get a message that Wordpress has been updated successfully.
If you run into any technical troubles, check out the Wordpress Codex on Updates.