How do you update terraria Xbox 360 to 1.2 or the newest version?

To update Terraria on Xbox 360 to version 1.2 or the latest version, ensure your console is connected to the internet. The game should automatically prompt you to download any available updates when you launch it. If it doesn't, you can check for updates by going to the game's tile in the dashboard, pressing the "Menu" button, and selecting "Manage Game" to see if an update is available. If an update is present, follow the prompts to download and install it.