If your iDevice is using a version of iOS lower than 5, you will need to use iTunes on your syncing computer to perform the upgrade. Use the Apple link below as a guide for the upgrade.
Also read the instructions from the section entitled "Update your device using iTunes" at the link below.
Information regarding transferring purchases from your iDevice to iTunes on your syncing computer can be found at the link below.
This procedure will upgrade the iPad to 6.1.3.
You will need to plug the iPad into a comuter running a current version of itunes since iOS 4.3.5 does not inlcude update over WiFi. also, you will not be able to update to 5, it will be 6.1.3, I beleive (the curernt version). This article may help: http://support.apple.com/kb/HT4623. Scroll down to the section entitled