You can update the phone if your computer and iTunes are up to date:
"Mac: OS X v10.6.8 or later
PC: Windows 7; Windows Vista; or Windows XP Home or Professional with Service Pack 3 or later
iTunes 10.7 or later (free download from http://www.itunes.com/download)"
Connect the phone via USB, select in in the left column of iTunes and click "Check for Update".
You can only update to iOS 6, not iOS 4.3