You're right that the AppleTV has firmware upgrades every so often and that sometimes they're significant and change the functionality of the device or make it -- hopefully! -- easier to use. That's all good, and indeed, it's one of the great things about a network device: the manufacturer can update and improve the firmware or operating system and just push it out to the device automagically.

The AppleTV does update itself automatically, however it can take a week or longer for it to notice that there's something new, so one answer to your question is "just wait and it'll do the work for you", but let's dig in further and figure out how to force a system upgrade, because it's not that incredibly hard...

I know, patience is difficult.

Instead, let's jump in!

Here's what your AppleTV displays at the topmost level:

To get to the upgrade, you need to move to the rightmost column, "Settings":

You'll want to choose "General" and it'll show a number of configuration settings:

If you're guessing that "Update Software" is our choice, you're right. Move down, then select it. Now the system will check back with Apple to verify that an update is indeed available.

If there is, you'll have the option of "Download and Install" or skipping it by choosing "Update Later".

Choose "Download and Install" so your AppleTV will update, then go grab a cup of tea, because it'll take a while...

Once the update has been downloaded, it'll go through two stages of update, and the screen does blank once or twice along the way, so don't panic. Step one:

And, a while later (it can be ten minutes or more), step two:

Finally, when it's done, AppleTV has the new firmware up and running, and it's a pretty big change from the earlier interface!

Give it another minute to load the popular movies and it's even more attractive:

So there you have it. The pics are a bit blurry, but I think you'll be able to get the gist of how to proceed and update your AppleTV as desired. Good luck!