MOOC - Drupal 7.18 manual upgrade for core

This article sums up the approach pretty nicely http://chocolatelilyweb.ca/tips-on-building-off-a-drupal-distribution

Basically, when setting up drupal you'll have a few locations of modules / code:

drupaldir/modules -- NEVER TOUCH THIS
drupaldir/profiles/mooc/modules -- NEVER TOUCH THIS (but if you upgrade the MOOC distro, these files will be updated)
drupaldir/sites/all/modules -- this is where you should put all modules you want to add
drupaldir/sites/default/modules -- this would be for very specific modules just for the initial install (only useful when doing advanced multisites).

Basically to upgrade just drupal core you want to download the latest version of drupal (non-dev) and then delete the profiles / sites directories that come included with that download. Overwrite everything else (except probably the .htaccess file included since you may be using your own) and then upload all of these files over your original ones.

Then go to the status page for your site and it will tell you if you need to run database updates (which it does through the browser).

Distributions of Drupal place all of their files in profiles/{distribution name}. As you will be updating your own settings.php and what not in the sites directory that's another one not to touch; everything else should be safe.

It is generally recommended not to upgrade core before the distribution does but that's up to you.

I also published a new release of the system so you could always download that and replace everything except your sites directory -- http://drupal.org/node/1888914