Update: As of August 31st 2011, the SharePoint Foundation 2010 and SharePoint Server 2010 updates are available as a single, combined update.  This means you don’t need to install the SharePoint Foundation update followed by the SharePoint Server update.

Carry out the steps below whilst logged on as the account you used to install SharePoint

Download and extract the software update for SharePoint Foundation 2010 and SharePoint Server 2010.

Stop the World Wide Web Publishing Service on each Web Front End server.

Install the SharePoint Foundation update on the Central Administration Server. Reboot if prompted to do so.

Install the SharePoint Foundation update on the other servers in the farm. Reboot if prompted to do so.

Install the SharePoint Server update on the Central Administration Server. Reboot if prompted to do so.

Install the SharePoint Server update on the other servers in the farm. Reboot if prompted to do so.

Run the SharePoint 2010 Products Configuration Wizard on the Central Administration server.

Run the SharePoint 2010 Products Configuration Wizard on the other farm servers.

Navigate to Central Administration -> System Settings -> Servers in Farm and check that the Configurtion database version matches the cumulative update you’ve just installed.  Next check the Status on each server in the farm is “No Action Required”.  Any server with “Upgrade available” will need to have the SharePoint 2010 Products Configuration Wizard run on it.