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I only discovered XoopS a few days ago and just did the upgrade. It was clear to me in the Readme to update the System. Worked just fine.
But, you will want to visit your modules and check your settings after doing an Update since the process returns many things back to default. I found that pretty quick when I saw or didn't see things as my test user that were in place before the upgrade. Same thing when doing an Update for other Modules anytime.
It is wise to document your custom settings before any upgrades or module updates. Hey, how about a 'Current Config' report function? System wide or per module reports. It can take a while to remember where that little setting is that makes things act as you wish.