New Kohana version is out, grab it from here:
And again, extract to a folder on your web server.
On good thing to do is extract both "Application" and "System" into a folder accessible to the user your webserver runs (usually, apache, nobody, httpd) and change the paths inside index.php
$application = '../application'; $modules = '../../../data/kohanav3/modules'; $system = '../../../data/kohanav3/system';
If you got the paths right on your environment, you should see a message saying your environment passes all requirements and you that you should remove the install.php file