The themeforest download package contains a file called version.rtf - it's a changelog and tells you which files were modified. If you didn't modify the theme files just replace the old files with the new ones (you can also delete the old files and upload the new ones). If you modified files just replace the files mentioned in version.rtf to update the theme files.
@oxman: I'm not sure if the update was succesful - the stylesheet + the framework information meta tags indicate that you're using version 1.1. The latests is 1.2.1. Maybe try to deactivate all plugins because they can cause js conflicts (especially in combination with the new jquery libary).