Edit "/vz/template/centos/5/{ARCH}/config/yum.conf", and change the base and updates repositories as below:
[base]
name=CentOS-$releasever - Base
mirrorlist=http://mirrorlist.centos.org/?release=$releasever&arch=$basearch&repo=os
#baseurl=http://mirror.centos.org/centos/$releasever/os/$basearch/
gpgcheck=1
gpgkey=file:///etc/pki/rpm-gpg/RPM-GPG-KEY-CentOS-5
#released updates
[updates]
name=CentOS-$releasever - Updates
mirrorlist=http://mirrorlist.centos.org/?release=$releasever&arch=$basearch&repo=updates
#baseurl=http://mirror.centos.org/centos/$releasever/updates/$basearch/
gpgcheck=1
gpgkey=file:///etc/pki/rpm-gpg/RPM-GPG-KEY-CentOS-5
Do a `vzyum {VEID} clean all`.
List updates:
vzyum {VEID} list updates
Update:
vzyum {VEID} update
Confirm that all VEs' have been updated to 5.5 with:
cat /vz/root/{VEID}/etc/redhat-release
You should see "CentOS release 5.5 (Final)".