As Vinay Kumar pointed out that it will not update global installed Angular CLI. To update it globally just use following commands:
npm uninstall -g @angular/cli
npm cache clean
npm install -g @angular/cli@latest
Note if you want to update existing project you have to modify existing project, you should change package.json inside your project.
There are no breaking changes in Angular itself but they are in RxJS, so don't forget to use rxjs-compat library to work with legacy code.
npm install --save rxjs-compat
I wrote a good article about installation/updating Angular CLI http://bmnteam.com/angular-cli-installation/