Venki,
It is NOT recommended that you update the JRE/JDK for the BI Platform, this done by installing service pack.
You can update the JRK/JRE used by Tomcat, this will help with performance and resolve many Java leak related issues. See link below with step-by-step guide.
How to update JRE/JDK for Tomcat7 on BI 4.1.x Platform
Regards,
Ajay