Update ist everytime the same procedure:
all wordpress-directories except wp-content
all wordpress-files in root except wp.config.php and your own files
like favicon.ico etc.
- copy via ftp the new files on your space
- start your blog an anything is ready - maybe an update of your db is automatically done
If you have done changes to /wp-admin/ oder /wp-includes/ you have to backup them too.
I dont like the automatic update via dashboard. Dont ask why
All my updates in this way since wordpress 2.5 doesnt have had any problem.
PS: if you find some errors in my english - you can take keep them