The built-in update function introduced in Joomla 2.5 is a great leap forward in simplifying Joomla version maintenance and generally works just fine . Except sometimes, when you know there's a newer version available, but the update checker remains unconvinced.
We just have to provide a little encouragement and everything will be fine.
These examples are from a Joomla 2.5 installation with the Bluestork - Default administration template; I haven't confirmed that the same issue exists in the 3.x series.
On the Control Panel page, the Joomla update checker thinks the Joomla is up to date with version 2.5.17, but I know from other sources that 2.5.20 is available.
- In the update manager (Extensions/Extension Manager)
- Click 'Purge cache' in the toolbar
- Which returns an odd message like
The number of sites enabled may be different.
- Back on the Control Panel, the update checker now realises that change is in the air
- Run the update as usual (click the button) 
- And then proceed with updating any extensions
You may want to clear the cache again just in case...
1 Of course you still do backups don't you...
2 I really mean it about doing backups.