You don't need to uninstall it - you just install the new update from the market and it installs as an update to your phone. I literally just did it.
You can then use Titanium Backup to merge he update with the original app into the system apps.
OR you could uninstall it using Titanium Backup, and then install the new version, but then I don't think you can easily move it to /system (well, I know you can do it relatively easily, but with TiBu it is pretty painless, a lot easier than using terminal commands).