The easiest way in a Debian based system is to log in as root and run "apt-get update" and "apt-get dist-upgrade", and that will upgrade your whole system. Pure debian, I've heard, updates more easily than Ubuntu (as things are less likely to break).
If you want the absolute latest firefox from the Mozilla site, just "apt-get --purge remove firefox" to remove the Ubuntu firefox and download Mozilla's. I installed mine in /usr/local/share/firefox, but in general it should probably stay in /usr/local somewhere just because that's what the /local folder is designated for.
I found out that I need to make some links in my local firefox directory for it to work with the sun java plugins and such.
First I renamed the original plugins directory:
mv /usr/local/share/firefox/plugins /usr/local/share/firefox/plugins2
Then link to the right plugins directory
ln -s /usr/lib/mozilla/plugins /usr/local/share/firefox/plugins
Maybe you know a better way to do this though.