Assuming you have already configured your installation to be able to install as root and run as unprivileged users as was described in previous posts, upgrading is a simple task, just run
$ sudo android
the select the desired components to install (i.e.: SDK Platform Android 2.0) and click Install Selected
Once you upgrade you still need to fix the permissions again, to do it run
$ wget -qO - http://android.codtech.com/android-tools/android-fixperms | sudo bash -s -- --sdk --sdk-dir=/opt/android
If you have installed android SDK to a different directory replace /opt/android in previous command by the correct location.
Hope this helps.