How do I upgrade git on Mac OS X?
None of the current answers will upgrade Xcode git. They will only install a newer version of git.
Xcode has changed its mind several times about the best git location. Depending on how long ago you have been installing Xcode you will see git binaries at:
/usr/bin/git
/usr/local/git
/Applications/Xcode.app/Contents/Developer/usr/bin/git
/Applications/Xcode.app/Contents/Developer/usr/libexec/git-core/git

Even if you update the PATH, Xcode will stick to its version. The only way I know to force it to use the newer version is replacing those git binaries by a link to the new one you installed.
ln -s /opt/local/bin/git /usr/bin/git

Repeat for the other path. Notice I use a symbolic link, not a hard one. Otherwise Xcode would replace your other installation during an upgrade