Upgrading with new upstream version normally happens in two steps:
the current tree in the upstream branch is upgraded
with the source from the new upstream package (the old version is kept in
repository in branches/upstream/).
oldVersion
the version in trunk/ becomes upgraded by merging
the changes between the upstream versions into the
trunk/ directory.
The script svn-upgrade (formerly
svn-uupdate) does both things for you and also creates
a new changelog entry. The first step is done internally by using a third
party script (svn_load_dirs, see Subversion book for
documentation), the second step is done with the merge
command of svn. Just run
svn-upgrade from you local working directory
(which corresponds the trunk/ checkout product).
After running svn-upgrade some files may be in conflicting state. This is naturally happens if you have modified some files in the upstream package and now upstream did something similar on the same positions so svn merge was confused.
When svn-upgrade complains about files in conflicting state, fix them manually. When done, use the svn resolved command to mark them as clean and svn commit to update the repository.