Difference Between Update and Upgrade in Ubuntu

Update :
Updates the list of available packages and their versions, but it does not install or upgrade any packages.

apt-get update

Upgrade :
Installs newer versions of the packages based on the updated list of available packages.

apt-get upgrade

After updating the lists, the package manager would know about available updates for the software already installed in a computer. This is why running update prior to upgrade is recommended.

Fixing broken merge list in Ubuntu

Sometime broken merge list poses a barricade on the path of further updates. To fix this problem, the old (flawed) merge list has to be removed first, then a new one has to be created. In Ubuntu 12.04, the following worked for me.

sudo rm /var/lib/apt/lists/* -vf sudo apt-get update