You put the new files right on top of the old files - you just replace them all. Then run the upgrade script (see
Running the vBulletin Upgrade Script "To do this, point your web browser at
http://www.example.com/forums/install/upgrade.php, replacing
www.example.com/forums with the correct URL to your own vBulletin installation.")
The xxxx.sql is a file - a backup of your database. You do NOT want to put it in your public_hmtl directory because anyone can get to that. You want to put it above that, ie. if you path is actually /home/yoursite/public_html/ you want to put it in /home/yoursite/.
I'm not sure what you mean about the directions being in hebrew??? The online manual is in english.
edit: Jason beat me to it and his instructions are much better than mine!