Theme Renewal Update & 2.1 Update

November is the expiration for my 1 year subscription on my Catch Themes. I just purchased another year for the Foodie World Pro theme and need to update it. I'm not sure how to do this, if I did it right. And, there is an update for 2.1 for my theme as well. It says any customizations in the theme files will be lost and consider using a child theme for modifications. This is all way over my head! How do I know if I need a child theme to update my renewal theme and the 2.1 update? And how do I update these? I downloaded the file for the new theme and tried to activate but then it looks like an older version of my site. And I can't tell which one is the right one to use now. Help!