Performing an In-Place Upgrade
The in-place upgrade is best for site collections smaller than 30 GB with few customizations. It is simple, but less flexible than the other approaches. It also takes the web applications offline during the upgrade process, which may or may not be OK.
To perform an in-place upgrade:
Perform a full backup of the content and configuration database, as well as the IIS metabase, and the web application folders. This assures that you can recover your system if there is a catastrophic failure.
Run PRESCAN.EXE /all. Prescan must succeed without errors for the upgrade process to work.
Install SharePoint (SharePoint.exe) on the server and select the "Automated in-place upgrade" (refer to Figure A-1).
SharePoint begins the upgrade process.
Once the upgrade is complete, review the web sites to verify that they work correctly.
Optionally uninstall the previous version of SharePoint from the server.