Just an extension to this. I'm using OSX Lion and you can install/update via the App Store.
To update Xcode, sadly, you have to download the entire .dmg file from Apple's website again.
I recommend installing into a different folder in the root of your hard drive. I have had problems in the past, not with this specific upgrade, that were fixed by doing a fresh install.
On Mac open the App Store and look for an Xcode update. You may need to update OS X first if, for example, there was an update to Command Line Tools (see also xctool) required by the Xcode update.
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