There are a couple ways you can update. You can delete the current theme (backup your changes first) and re-upload the new theme immediately through the WP backend. Or you could do the same thing through FTP.
If you’ve made changes to your css, of course if you overwrite it with the new css file it will erase those changes. When it comes to updating an “edited” css file, there is no easy way to do it really other than manually adding in the differences. You could use a site like – http://www.diffchecker.com/ to compare……but there was a lot changed from 1.0 to 1.2.1 and that was due to the Genesis 1.8 update (at the time) and the needed css changes to make everything “Responsive”.
So it comes down to – if you haven’t made that many changes to your css and you can remember what all you did, then go ahead and write those changes down on a list of some sort so its saved somewhere…..then make the update. If you did make a lot of changes then it may be difficult to try and keep those changes and update at the same time.