Same as the case of Google App Engine Updates; if you installed GWT and Google App Engine using Eclipse with Google Eclipse Plug-in, as described in my previous article "GWT + Google App Engine@Eclipse x Google Eclipse Plug-in", you can update Google Web Toolkit inside Eclipse.
Start Eclipse and, click Help -> Software Updates
High-light Google Web Toolkit SDK 1.6.4 and click Update...
Eclipse can find the update 1.7.0 automatically, just click Finish.
After updated, you will be asked to re-start Eclipse. That's all.
