I cannot give you any great advice here - I guess everybody has their own favorite way of upgrading.
I tend to keep managers forever and migrate the new versions into them. That's because you never know how much of your old code you might need in two, five or twenty years, and there you might also need some old versions of VAST code in order to understand the code.
But one thing that always comes to my mind when I upgrade is that I don't really like the way the installation process works.
I would like not to have the manager directory in the VAST client installation directory by default, since my manager lives much longer than a client install and the client install directories always have the client version number in their name (since I tend to have several versions installed on a machine, I consider this a good idea).
I'd like to see an installation option that says: update an existing library, rather tha "install the manager". It always makes me shiver when I press "install" and mean update my library, which in fact just importing new code into it. This is especially important if you have your manager sitting on a headless unix/linux server where you currently cannot run any installation process at all (see my blog post http://joachimtuchel.wordpress.com/2010/01/04/a-minimal-va-smalltalk-library-server-on-opensuse-11-2/
for details). I need to install onto a linux based library from a windows machine. I never tried doing that with the installation program, because there is no visible option to do so. Maybe the installation program is a lot smarter than I think, but I am a coward when it comes to playing around with our development library...
I would like to be able to install a new version's manager on my machine parallel to the existing one (without merging it into the old one), just to keep them in parallel for testing several versions. I can always chose to export/import my old code into the new one later. VAST uses the Windows Registry to prevent that.
Just a few thoughts...