To Install simple upload all of the files in this zip file to your website via ftp then set the chmod/permisions on the includes/config.php file and images directory to 777
To Upgrade upload all files apart from the includes/config.php
If you DO NOT want to replaces the template files do not upload them either but you may not be able to use some of the new features.
Then load yoursite.com/install/ and you will be given upgrade instructions.