It is highly recommended to update your WordPress to latest version:

Version 3.0.4 of WordPress, available immediately through the update page in your dashboard or for download here, is a very important update to apply to your sites as soon as possible because it fixes a core security bug in our HTML sanitation library, called KSES. I would rate this release as “critical.”

To manually update WordPress we can do this:

1) Download WordPress 3.0.4

2) Login to your server with FTP or SSH

3) Make a backup of “wp-content” and MySQL DB

4) Delete all files from WordPress directory except:

.htaccess
wp-config.php

5) Delete the following directories:

wp-admin
wp-includes

6) Upload the new files of WordPress except:

wp-content
wp-config-sample.php

Done!