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For most SD installs, you update by downloading the .zip on your computer, putting it on the SD card using a card reader (you should only see one small partition on the SD card), then putting the card back in the NC and booting into recovery by holding both the power and 'n' buttons for about six seconds when you power on the NC (if you miss the timing, just keep trying). The SD card's 'recovery' should be an automatic installer that will install the update for you.
Also, you don't need to wipe data--that's just making more work for yourself setting everything up again.
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