In the steps below, I will refer to your existing K2 folder as k2-old and the newly downloaded K2 as k2-new.

1. Download the latest release or nightly.
2. Upload to wordpress/wp-content/themes/ Do not overwrite your existing K2 folder.
3. Copy any custom styles in k2-old/styles/ to k2-new/styles/
4. Copy any images in k2-old/images/headers/ to k2-new/images/headers/
5. If you're using the K2 Sidebar Manager to manage your sidebar (see notes below):
• Goto Presentation > K2 Sidebar Manager panel and click on the backup button.
6. Goto Presentation > K2 Options panel, make note of your current settings and click on the Reset and Uninstall K2 button. This will deactivate the old K2 theme.
7. In the Presentation > Themes panel, activate the new K2 theme.
8. Goto Presentation > K2 Options panel and customize your settings.
9. If you're using the K2 Sidebar Manager to manage your sidebar (see notes below):
• Goto Presentation > K2 Sidebar Manager panel and click on the restore button.

K2 Sidebar Manager Notes

If you're using a localized version of K2, you will not be able to backup/restore your Sidebar Manager settings if you're using RC1 to RC4 or a nightly revision of 601 or earlier. Attempting to do so will corrupt your Sidebar Manager settings.