Here are the steps for upgrading Magento with a full package or via SVN.
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Backup your database
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Backup all the code you modified yourself, and don’t forget to keep the original installation archive
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Take care of saving the media directory that contains all the uploaded product/category images
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Create a backup copy of app/etc/local.xml file
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Download a new installation archive or run SVN update if you checked it out from the Magento repository
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Extract and upload all the files it contains to your server
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Delete var/cache and var/session directories
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Point your browser to any Magento page
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Database upgrades should happen automatically
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You are done!
