We don't touch any of the files in the /Data/Sites folder during upgrades.
All you need to do is restore any customizations from your old Web.config (such as machinekey) to the new one.
It is a good idea to back up the entire site filesysem and database before upgrading so that if anything were to go wrong you can restore, but generally upgrades work smoothly.
Its a good idea to review the articles:
Before upgrading, you may also want to review the release notes for all versions between your current version and the latest version.
Hope that helps,
Joe