Unlike software that includes an automatic updater that periodically checks for updates, WebMatrix doesn’t seem to have such a feature.
On Feb 18th, Microsoft released an updated version of WebMatrix which includes a number of bug fixes. See this IIS forum post for further details.
I upgraded my WebMatrix installation as suggested in the above post. Although the upgrade took a long time (over 10 minutes), WebMatrix worked just fine after the upgrade. All the settings and projects are also intact.
If you have WebMatrix installed, I recommend you upgrade as soon as you get a chance.