I am using a samsung galaxy pro(GT-B7510) . Will this update cause any malfunctioning or errors. Will it make me lose my existing phone data or applications(built in). Also what is official way to update my phone
the question would be if you are rooting your phone or is it a auto update. if its a clean version from a auto update, you shouldn't lose anything. If you root, you may have to format your phone, and could lose it all.
You will need to completely back up your phone before doing an update, because EVERYTHING will be wiped clean (that is not on the SD card), so any contacts that are not backed up to your SD card, online somewhere or to your computer, will be gone, same for all text, email, videos and pictures (not backed up, and not on the SD card, online, on your computer, they will be ERASED forever.
As for problems, most phones don't have problems with the updates.
The official way is to do the OTA (over the air) update from your phone SETTINGS. Which goes through your cell phone carrier. If they do not have an update for your phone, you will not be getting one, unless Samsung has an official update for your phone on their website.