Installing a beta of iOS follows a different path from a traditional upgrade.
– Backup your iPhone
– Download the beta
– Double click the dmg file to extract
– Start iTunes and select iPhone in the upper right
– Hold the Option key and select Restore iPhone
– When the Finder dialog appears, select the .ipsw file in the Devices section
Once you’ve installed a beta, upgrades can generally be done via the Software Update option in Settings.