1. backup your db, from the OpenERP Client (file -> database -> backup)
2. install the new version of OpenERP
3. restore your db, from the OpenERP Client (file -> database -> restore)
4. run the migration, from the OpenERP Client (file -> database -> migrate database)
5. hope
This is, in theory, the best practice.
This works if you didn't installed too many addons, and if you didn't customize views and objects.
A more practical way is to install the new version of openerp, then migrate data from the old instance to a new one using tools like the server_migration addon or writing your own procedures using XMLRPC apis of OpenObject or with OOOR:
http://tinyurl.com/yabnsxq
Btw, migrations from/to minor versions (ie: 5.0.6 -> 5.0.7) of OpenERP usally go smoothly.
Other migrations, like 4.x -> 5.x are often a pain in the *