1. Download the latest build from the members area.
2. Extract the archive to your hard disk (or to the server with any available utilities).
3. Upload (or move) all files EXCEPT for the cache_builders/custom, includes and styles directories.
4. Ensure chmods. All directories should be 777. All files should be 666.
5. After uploading (or moving) all directories, and ensuring all chmods are correct, run the install/upgrade.php script.
6. After you've gone through the upgrade procedure in the upgrade.php file, be sure to REMOVE the install and importers directories.

NOTE Please be sure to create a backup of your database and files before upgrading your installation; the upgrade should happen without a hitch, however, it's better to be safe than sorry...

Not sure about line 4 - I would be wary about making all directories 777 and all files 666.

What about language files?

I'm not too sure about this but if you make any changes to the language files will they be overwritten when you upload the upgrade?

When you go through the upgrade process it displays a page with language file changes and asks you if you want to update them.

I'm a little confused about this process.

I'm basing #4 off of the install instructions; in fact I prefer files 644 and directories (other than cache and templates/compiled) 755.

@Scriptkeeper
Language files and templates must be 666 if you plan to use the web-based editors on them.

I don't edit my wordlet fiels, so I'm unsure as to if they're updated completely

Sorry - what I meant was the instructions do not mention directories such as scripts, libs etc.. So not sure if we should be doing a blanket change to 777/666

According to initial statements "everything" should be 777/666; personally I say that nothing should be... IF you PLAN to use the built in editors, I myself would recommend chmods of the template files 666 and wordlet files 666 but other than that, I would recommend for securities sake to only have them 755/644.

Just wanted to add...

Careful overwriting your graemlins and posting icons if you've replaced them with custom ones...

Yeh, for users who insist on customizing their graphics, you should create a new folder with your own images, so that an upgrade does not overwrite your graphics...

What's wrong with this upgrade route?

Upload the install directory
get install\upgrade.php in your browser
replace/remove/add the files that upgrade.php mentions
follow the next steps
Done...

Nothing that i can see