Updating a module is usually two steps:
- Replace the files with the new version you downloaded, for example via FTP.
- Run update.php (it is not always needed, but run it to check if updates are needed).
When updating, it can be a good idea to try the update on a local development environment to check that nothing breaks, and do a backup before the live update. Some updates are minor and won't need this.
Views, which stores a lot of configuration in the database and has recently undergone major changes, is one of those modules where you usually want to test it out before upgrading.