You can update your iOS a couple of different ways:
If your device is running iOS 5 or later, you can update using the built-in Software Update feature. To do this, first connect your device to a power source (i.e. the USB power adapter or your computer). Then tap Settings > General > Software Update. It might take your iOS device a few minutes to download and install the update.
If you are running iOS 4.3.5 or earlier, you will need to update your iOS device through your computer. For this, you’ll need to have the USB cable that came with your device, an internet connection and the most current version of iTunes installed on your computer (www.apple.com/itunes). With your iOS device connected to your computer, open iTunes and select your iPhone/iPad/iPod under “Devices.”
Generally, iTunes will prompt you for the software update, but you can force the install on your device by clicking the “Check for Update” button. iTunes will download the latest software to your device and will also back up your data. This process may take a few minutes depending on your Internet connection and how much data you have on your device.