Look it's no big deal to upgrade your existing Risc os setup but you have to be careful , i will outline it for you so follow the steps.
Step 1: start risc os on your PI
Step 2: create a new directory folder called new PI in the main window and open it by click on the new folder the folder will be empty leave it open for the files that you need to download later.
Step 3: Open netsurf and click on the ROOL Link on the welcome page
Step 4: Click on the software link in the top navbar this opens to the download page, click on essentials-ROM images ect this opens the ROM image Releases.
Step 5: click to download new boot (the file you need is the first of the disc based downloads called Beta HardDisc4) this will open a netsurf download drag the blue folder with the yellow & red Z into you open New Pi folder you created at step 2 this will take a minute or two depending on your download speed when it's done you will have a file called HardDisc4.
Step 6: when this is downloaded move down the page to the new beta PI Rom (RC12) and download this rom and put it in your new Pi folder.
Step 7: rename the file HardDisc4 in your new Pi Folder to HardDisc, When you have done this you can double click on the file to open it, this will open a folder with the folder called HardDisc4 click & drag this into your New Pi folder to Unpack.
You will now have a file called HardDisc and a folder called HardDisc4 if you open the folder you will find !boot, Apps Ect.
Step 8: you need to update you existing hard disc image with the new files in Harddisc4 folder.
So menu click over the raspberry pi icon on the right hand side of the Iconbar at the bottom of the screen select configure
this will open the configuration window, click boot icon top left, then click install to open boot merge,
Click drag the !boot out of the folder HardDisc4 onto the merge window the buttons at the bottom of the window will show
Agenda Cancel Merge click the merge button this will update your boot system, also copy all the other folders by drag & dropping them on top of the existing folder in the main window to complete the upgrade to you boot system.
Step 9: important bit next so be careful, when the merge is complete close the configuration window but leave the New Pi and main window open. be careful with this bit hold the shift key down and double click on the !boot in the main window,
This will open your !boot Folder look for the folder called Loader and double click to open inside you will see Boot/Scr BootCode/Bin, RISCOS/IMG you need to update the file Riscos/IMG with the file in the folder New Pi called BCM2835-RC12/5/21 open this file the same way that you opened harddisc the file needs to be renamed to work but don't do this until you have copied it into the folder called Loader, go ahead and copy the file into the folder called Loader, next rename the existing file called RISCOS/IMG to OLDRiscOS/IMG, now you can add the /img to the file RISCOS renaming it to RISCOS/IMG.
Step 10: Restart your Pi your pi will now be running the RC12 build.
Hope this helps