The installer creates two partitions on the SD card:
1) EXT2 for kernel (uboot loads the uImage to RAM and runs it)
2) EXT3 for the rootfs (is mounted by Kernel as /)
So basically if you want to upgrade your kernel version you could download the uImage from
http://sheeva.with-linux.com/sheeva/, mount the first partition of the SD and copy the new uImage to it (do not forget to rename it to uImage)
Next step, download the kernel modules from the same URL and unpack them to / (the root is mounted from the second partition of the SD card)
You are done, reboot the system