Thats done via your host. I would suggest (assuming you have FTP access) to clean out your space and download WP3.5 from http://wordpress.org and install it manually. Sometimes doing it through hosts can cause issues.
Once it is installed and all set up and running then you can install the theme either via ftp or wp-admin (make sure you upload JUST the theme folder).
The “back up” you mentioned – that is of a database or WP content? Ideally I would sugest creating a fresh database to add your new installation of WP if possible.