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Download the latest packaged version of Panopoly from Drupal.org. This will include updated versions of all of Panopoly’s bundled modules, themes, and libraries.
Since the profile now includes most of Panopoly’s libraries and modules in profiles/panopoly/libraries and profiles/panopoly/modules, you will need to remove the duplicate code (this should include everything except for Panopoly Demo).
Upgrade your existing site to use the code you just downloaded. Check out these instructions for more information: http://drupal.org/node/1223018
Backup your database and run update.php on your site. This will perform several database updates for Panopoly and its bundled apps and modules.
Navigate to the admin screen for Features (admin/structure/features) and revert any overridden features (unless you have intentionally made overrides you want to keep).
Here are some of the updates in this release:
Panopoly Profile
Massive refactoring of the way dependencies are handled in Panopoly. All make file information for dependent modules and libraries are moved to their appropriate Panopoly module.