When you log in to godaddy, you’ll need to click on the Hosting Account List, in the left menu:

From there, you’ll open the control panel associated with your domain:

In your control panel, at the top right, look for the “Godaddy Hosting Connection” Link:

In Hosting Connection, switch to the My Applications tab:

My Applications will list all of the software you’ve installed, including WordPress. Click on “Installation Details” for the WordPress installation you want to upgrade:

At the very bottom of this page is the link to upgrade wordpress. Like Fantastico, this will automatically back up your database and your files, and keep the backups for a month, in case you need to go back to the previous version.

That should take care of your upgrade. Again, if you have any difficulty, please don’t hesitate to contact us to help you with the upgrade. Just as a sidenote, the relatively long number of steps to upgrade on Godaddy, relative to other hosts, is one of the many reasons we recommend Bluehost to all our customers.