Updating Ubuntu is perfectly fine.
The only somewhat important feature you might lose out on is EXT4. If your current file systems are EXT3, you can convert them to EXT4, but those will not gain some of the benefits (extents as I recall) of a freshly created EXT4 fs. You'll still be able to create new EXT4 fs with all the features of EXT4.
If you've installed horrendous numbers of third party packages from external repositories or .debs or source, you might have issues with those packages, but the main system should still be fine. This is, really, the only scenario what should preclude using the upgrade option.
While it's mostly a requirement to do a fresh install with windows and even some linux distributions, Ubuntu is not one of them.
And, yes, use the update manager as recommended.
And, yes, wait a few days or a week or two before the update. While this has been in beta for a while, and lots fo bugs are worked out, there'll be more right after mass adoption begins.
Absolutely, wait a few days / weeks before you upgrade. I upgraded this morning, and due to a graphics issue on 9.10, that wasn't in 9.04, I'm moving back for now. Will try upgrade again in a few weeks when more people have done it... :) – Nick Haslam – 2009-10-30T12:36:56.937