If you’re impatient and can’t wait for the OTA update it is very easy to update to the latest software by following the instructions over at the Android Forums

It takes about ten minutes in total to update.

All previous data and settings are preserved.

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Google is rolling out the first update for the Nexus One

Main features of the update are:

Pinch-to-zoom functionality: devices will now include a new pinch-to-zoom mechanism in the phone’s Browser, Gallery and Maps applications

Google Maps: the Maps application with be updated to a new version, Google Maps 3.4, which will include:

• Starred items synchronized with maps.google.com – access your favorite places from your phone or computer
• Search suggestions from your personal maps.google.com history – makes it easy to search for places you’ve searched for before
• Night mode in Google Maps Navigation – automatically changes your screen at night for easier viewing and driving

Google Goggles: this mobile application will now be available directly on your device by launching it from your All Apps menu. Just use your Nexus One camera to start searching the web

3G connectivity:  a general fix to help improve 3G connectivity on some Nexus One phones

In order to access the update, you will receive a message on your phone’s notification bar. Just download the update, wait for it to install, and you should be all set. This update will be rolled out gradually to phones – and most users might not receive the notification until the end of the week

Full info from Google here

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