Upgrade from 1.0.0 (1 Viewer)

[caveman]

MediaPortal Version: 1.0.0
MediaPortal Skin: Blue 3
Windows Version: Vista 32 Professional
CPU Type: AMD 4850e
HDD: Samsung 320
Memory: 4GB
Motherboard: GIGABYTE MA78GPM-DS2H
Video Card: ATI Radeon 3400
Video Card Driver: Catalyst 8.12
Sound Card: Realtek Onboard
Sound Card AC3: Realtek Onboard
Sound Card Driver: 6.0.1.5694
1. TV Card: FireDTV C/CI
1. TV Card Type: DVB-C
1. TV Card Driver:
2. TV Card: Haupage 1300
2. TV Card Type: analog
2. TV Card Driver:
3. TV Card:
3. TV Card Type:
3. TV Card Driver:
4. TV Card:
4. TV Card Type:
4. TV Card Driver:
MPEG2 Video Codec:
MPEG2 Audio Codec:
h.264 Video Codec:
Satelite/CableTV Provider:
HTPC Case: Origenae X11 v2
Cooling: synth ninja mini
Power Supply: DeZen - SCP400FL - FLPower - PSU 400Watt
Remote:
TV:
TV - HTPC Connection:

I'm planning an upgrade to the newest version.
But have posponed it for some time due to the fear of loosing TV-Server and mediaportal for the time it takes to do the upgrade
Anny sugestion on how best to do the upgrade? Maby make a backop of the system drive and test the installation and then do the switch? What sugestion or experience do you have?

Also on how maby to upgrade to better Codecs so it would be possible to watch 720p and 1024p mkv files directly from mediaportal without having to relay on Mediaplayr Classic or VLC?