Upgrading modules is very simple. Themes, modules, the Form Tools API and the Form Tools Core script are all upgraded in the same way. Log into Form Tools as an administrator and go to your Settings » Main tab. There, click the "Check for Updates" button. That submits all relevant information about your installation - including your module versions - to the Form Tools site. The upgrade script then determines what components, if any, have been updated and generates a custom zipfile containing whatever components you want to upgrade.
The generated zipfiles mock the folder structure of your Form Tools installation exactly, and only contain the files needed for the upgrade. So, to upgrade the files, just upload the entire root folder to your own server, overwriting the old files. Once this is completed, log back into Form Tools and go to the Modules page. There, click the "REFRESH MODULE LIST" button at the bottom of the page. For all the modules that were just updated, the rows should be highlighted and you should see an "UPGRADE" link instead of "SELECT". Just click each link to upgrade each module.