I just used the Envato WordPress Toolkit plugin to successfully update from Vellum 1.0 to Vellum 1.0.1.
It basically just moves the existing Vellum folder into a ‘wp-content/envato-backups/’ folder, and then installs the new version of the theme from your ThemeForest downloads to your web server.
To install the Envato WordPress Toolkit plugin, first download the plugin zip file to your computer (click on the “direct download link” Andy has posted), then go to Plugins > Add New, click on the Upload link, follow the on-screen instructions.
The plugin is very easy to use and the most difficult part of the procedure was finding my secret API key. To do that, login to your ThemeForest account and select Settings from your account drop-down menu. On the My Settings page, click on the API Keys tab in the Personal Information & Profile menu on the left. Enter a label name (such as “Vellum” for example) and then generate the API key. Then use your mouse to select the jumble of letters and numbers that is the API key, copy it and then, back in your WordPress admin, paste it into the plugin’s Secret API Key input box.