The NuGet team just released NuGet 1.8. Unfortunately there is an issue when upgrading it via the NuGet package manager. The following message appears and the installation fails.

VSIXInstaller.SignatureMismatchException: The installed version of 'NuGet Package Manager' 
is signed, but the update version has an invalid signature. Therefore, Extension Manager 
cannot install the update. 

  at VSIXInstaller.Common.VerifyMatchingExtensionSignatures(IInstalledExtension installedExtension, 
    IInstallableExtension updateExtension) 
  at VSIXInstaller.InstallProgressPage.BeginInstallVSIX(SupportedVSSKU targetAppID)

As explained in the NuGet release notes, one solution is to uninstall NuGet from the VS Extension Gallery before reinstalling. Note: If Visual Studio won’t allow you to uninstall the extension (the Uninstall button is disabled), then you likely need to restart Visual Studio using “Run as Administrator.”

Another alternative (courtesy of Jeff Handley) is to install this Visual Studio hotfix and the next time you start Visual Studio, updating via the package manager will work.