The Oracle Solaris Installer does not present the Upgrade option when the partition tag of the slice that holds the root (/) file system is not set to root. This situation occurs if the tag is not explicitly set when labeling the guest's boot disk. You can use the format command to set the partition tag as follows:
AVAILABLE DISK SELECTIONS: 0. c0d0 <SUN-DiskImage-10GB cyl 282 alt 2 hd 96 sec 768> /virtual-devices@100/channel-devices@200/disk@0 1. c4t2d0 <SUN146G cyl 14087 alt 2 hd 24 sec 848> /pci@400/pci@0/pci@1/scsi@0/sd@2,0 2. c4t3d0 <SUN146G cyl 14087 alt 2 hd 24 sec 848> /pci@400/pci@0/pci@1/scsi@0/sd@3,0 Specify disk (enter its number)[0]: 0 selecting c0d0 [disk formatted, no defect list found] format> p PARTITION MENU: 0 - change `0' partition 1 - change `1' partition 2 - change `2' partition 3 - change `3' partition 4 - change `4' partition 5 - change `5' partition 6 - change `6' partition 7 - change `7' partition select - select a predefined table modify - modify a predefined partition table name - name the current table print - display the current table label - write partition map and label to the disk !<cmd> - execute <cmd>, then return quit partition> 0 Part Tag Flag Cylinders Size Blocks 0 unassigned wm 0 0 (0/0/0) 0 Enter partition id tag[unassigned]: root Enter partition permission flags[wm]: Enter new starting cyl[0]: 0 Enter partition size[0b, 0c, 0e, 0.00mb, 0.00gb]: 8g partition> label Ready to label disk, continue? y partition>