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If a new version of Ubuntu is released, the update manager will notify you via an upgrade notification pop-up bubble. To upgrade, click the Upgrade button, and follow the instructions.
Manual
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If you want to manually upgrade, first find out the codename for the next version of Ubuntu (in the same vain as Warty, Hoary, Breezy, and Dapper). Now open this file:
/etc/apt/sources.list
and replace the word "dapper" (or the code name of your current ubuntu) with the new codeword. Now run:
sudo apt-get updates
This command updated your package list. Now upgrade the system:
sudo apt-get dist-upgrade
You are asked if you wish to continue. Press Y, and then press Enter to continue. Your entire system is now upgraded.
source - http://www.informit.com/articles/article.aspx?p=667418
