You can change the featured product on the home page of the admin section. It is at the bottom. You will update the item you would like to be the featured item and click on the button in the upper right to make it the featured item.
For the most popular item this is based on the item that has sold the most. To update the item you can just put your store in test mode, then make a test purchase for an item. It will then have the most ordered and be the featured product. You can also update the content for the featured item pod in the admin area under the content tab for the Home Page.