It’s just like updating WordPress…it should not change any settings. Simply upload and replace the current theme files with the new ones and that is all you need to do. What you DO NOT want to do is uninstall the theme and re-install because then there is a chance you would lose your settings and widgets you published.
Unfortunately the click to update a theme is only possible when you download a theme from the wordpress.org site (from within the WP dashboard), but for third party themes from other places, like mine, it’s done as I described.
Current Encounters version is 1.7.7
Because of the changes I made for individual purchased themes, I upgraded you to the Encounters theme membership. You should now have access to the “Downloads” menu link on my site for downloading Encounters.
Keep up to date by following me on Twitter, Facebook, or Google+, but you can also check the Updates section here at Styled Themes (off the main menu).