When a new version of VirtueMart 1.1 series has been released a patch is made available to enable the updating of a previous version. Updating will not cause you to lose products etc, but always backup the site first and test the update on the backup copy - see http://forum.virtuemart.net/index.php?topic=86923.0
Select "Components" => "VirtueMart" => "Admin" => "Check for Updates" from the VirtueMart administration menu. This opens the page that allows you to check for updates.
After you've opened up the page, press the button "Check now". It will retrieve the latest version number from the virtuemart.net server.
If there's a new upgrade version, you will be given the opportunity to download it directly from our to your server. The package will be stored in your "cache" directory, where it's extracted.
The following page lets you review which files are going to be updated and what you need to do. If you have made any code hacks or modifications you should look through this file list to check if files that you have modified are about to be updated. If this is the case it is better to download the patch to your local pc and to merge your hacks with the revised core code, then update by ftp.
If everything is OK and there are no hacked files involved then you can proceed to apply the patch. Note that the original files will be replaced by the files in the update. Any modifications you made to those files will be overwritten.
If there is a problem connecting to the update server (some hosts block such actions) the patch package can be downloaded from http://dev.virtuemart.net/projects/virtuemart/files
and installed using the Upload a Patch option in the VirtueMart Update Check pane.
You cannot use the Joomla! Extensions installer to update with the patch. You will just get a "Could not find a Joomla! XML setup file in the package" error.
For a picture guide see http://virtuemart.net/index.php?option=com_content&task=view&id=303&Itemid=152
If for some reason, such as server configuration, none of the above works then you can download the patch, unpack locally and FTP to the server, over-writing the existing files.
As with any update to a Joomla! site, backup before making any changes.
The error message "Error! Could not find a Joomla! XML setup file in the package" is usually a result of trying to add a patch using Joomla's installer instead of the VirtueMart updater. VM patches cannot be added via Joomla.