Kirby has two updatable components: The kirby folder and the panel folder.
The most straight forward way to update is to fetch the latest ZIP file from http://download.getkirby.com and just replace those two folders on your server.
Updates with Git
If you are using Git submodules for the kirby core and the panel in your project, updating via the command line is very easy:
git submodule foreach --recursive git checkout master git submodule foreach --recursive git pull
Updating each repository
If you've cloned the kirby folder and the panel separately and you don't track them with submodules, use the following lines to update:
cd kirby git checkout master git pull git submodule foreach --recursive git checkout master git submodule foreach --recursive git pull cd ../panel git checkout master git pull
Cleaning the cache
If you've got caching enabled, you might need to clean the cache entirely to be sure nothing breaks. Just delete all contents from /site/cache in order to do so.