question: how does the ubuntu upgrade process work? do you reinstall everything from scratch? or can you just apt-get your way to a new release?
Or start the Ubuntu Update Manager (System -> Admin -> Update Manager), which will display an option to dist-upgrade when one is available.
You have to use some other commands to get an actual Ubuntu version upgrade (I don't know them, but you seem to have the GUI version down.)
After a little digging, the command line to upgrade to the newest Ubuntu version is:
%> sudo apt-get update
%> sudo apt-get install update-manager-core
%> sudo do-release-upgrade