If you are running a site with Joomla version 1.6.0 to 1.6.4, you can still use the Extension Manager → Update to update your site. However, in this case you will need to go through the update process two times.
The steps are as follows:
administrator/index.php?option=com_installerto reload the installer page. In this case, navigate back to the Update tab, check the box for the Joomla update and press the Update button again.
At this point, you have updated to the latest version and that version should show in the bottom of the screen.
It is important to understand that you need to complete both steps. The first update updates your system to an intermediate version of 1.7.0. This is not a production release and only is intended to allow you to complete the second update. So it is important to complete the second update to get to the latest production release.