I just upgraded to Git 1.8.0.1 for Windows, from my previous version 1.7.9.mysysgit.0. I downloaded the new version from the Git site and installed through the normal Git in
Using the command "where git" find out how command prompt picks up the version. Once you have the path, you can go ahead and uninstall / delete previous version completely. Then if you install and make sure the new installed location is in the path, it should just work fine.
Using git-friendly tools like cmder will make your life much easier. You don't really have to use dual boot or cygwin anymore since the support for git in windows is already top-notch now. (Git for windows installs msysgit which includes all necessary unix tools from MinGW. MinGW has been there for a while and is pretty stable. If you want you can install the full version of msysgit rather than Git for Windows. msysgit is available on Git for windows page at the bottom.)