Cannot install the Directory update

Hello, It doesn't appear as though the Directory plugin updates automatically as it said on its web page. I am already running Directory Version 2.0.1 and see the notice that Version 2.0.3 is available. So I downloaded the zip file 68168_wordpress-directory-2.0.3.zip and tried installing it from Dashboard > Plugins > Add New > Upload. But I receive the error message that folder already exists.

When I looked in the Manuals there are no instructions on how to install this update. Searching the community forums is like looking for a needle in a haystack and I haven't found any useful information.

And when I install this updated Directory I want to be sure to keep all my previous settings and listings so that nothing breaks. How can I do this?

thanks!