if your forums are at '/ubbthreads' dir, that would be the installation dir
_this_ forum's installation dir is /forums, for example
so for you, just upload and overwrite all the files _except_ those mentioned ( cache_builders/custom, includes etc.. )
to /ubbthreads/admin, /ubbthreads/scripts etc etc...
there will also be /ubbthreads/install ( not the installation dir, but the actual upgrade stuff you will need to run )
after upgrade complete, delete the ubbthreads/install dir