Just make sure that your batteries are good before you upgrade. Backing up to an existing card before upgrading is not needed, as you can't restore from that file - it will be from an earlier release!
So, the batteries are good, power down, remove any old backup card, insert the new card, (the VM card won't matter if it is in or out), power up and watch the light flash green/red until it flashing stops and the phones come to life. NOW, do a backup onto the new card.
Now do whatever programming you need to do to take advantage of the new software features, test them out, and when you are satisified, do another backup to keep the new programming.
The upgrade card SHOULD also contain the modem for remote access, assuming you are purchasing one that is brand new from the factory. Sometimes, Avaya Business Partners will burn the upgrade onto a card that doesn't also have the modem, to upgrade a customer that already has a remote access/backup card. That way, after the upgrade, the put the old card back in for backup/remote access, and take the upgrade card back to the office to reprogram again for another upgrade. Make sure that the card you are purchasing includes the internal modem.