I need to update jQuery version for drupal manually?
1- @see /misc/jquery.js 

2- its better to add ur jquery to your theme .info file 


go to your theme folder
insert your jquery file into the same folder of your theme (E.g theme name new_jquery.js)
in the same directory open yourThemName.info file
add this line  scripts[] = new_jquery.js


3- its not prefered to use Jquery 1.6 with Drupal 6

4- use jQuery.noConflict() to avoid conflict