Click the Update Now button.
Accept the End User Software License Agreement
Check Basic Protection
Now it will install the update.
When it is done, AVG Free will open up and across it will be a green banner with this on it:
You've successfully updated to AVG Antivirus Free 2014"
Click on Continue.
Close AVG Free.
If you missed the pop up and you want to update it manually, or, if you updated AVG Free and now you have the trial version, go here, for instructions and download links.