I upgraded Magento no problem via Softaculous, :D, however the upgrade wiped out my theme styling and created an error report. :-( I was unable to even to get into the back-end and had to resort to a back-up to put it back the way it was...thanks to my hosting provider!
Its a scary lesson because it is not like Wordpress which upgrades happily without messing up the theming... although I have not tried a Wordpress upgrade via Softaculous.
All I can say is, if the upgrade did its business and upgrade the core files/directories only (not sure if thats possible with Magento) and then everything work afterwards with images etc in place, then that would be fantastic and seriously awesome - sadly it didn't so now I will need to do a clean install if I am to upgrade at all.
Sir if you have modified the default theme then the files will be replaced because the files exists in the Magento package and the files are unzipped during the Upgrade process. If the theme was custom then the files should not be replaced because the files do not exist in the package.
I had a sneaky suspicion it was to do with the theme files....mmmm.... I did take a back-up in Softaculous as well. I will try again a after checking the theme files very carefully.
Thanks for your input here and for the link top How to Backup an Installation.