how do you update iphone 4 on itunes 11.0.1.12?

Your iPhone should be displayed top right when it is plugged in to your computer.

Select your iPhone and you'll see in there there is the option to update.

If you have iOS 5 (as shown on your profile) you can update iOS on your phone by going to Settings > General > Software Update.

Same way you've always updated using iTunes. On the Summary Pane, your phone connected, iTunes running, hit the Check for Updates button.

Do you not see the sidebar? If so, iTunes>View>Show Sidebar.