Generally speaking, the Core code should never be touched while developing. There are many mechanisms in Magento to allow you to work around any issues, even internal bugs. That being said, there are other issues to look out for as well.
- Do any community or local modules override core code (Can be searched in the modules folder for
<rewrite>, and it is bad practice as they really should use non-obtrusive code such as events ) - Magento tries to keep the code backwards compatible, but sometimes the code does change significantly (Can be found here http://www.magentocommerce.com/download/release_notesCan be found here), if the backwards incompatible changes are many, that might add to the process.
- Is it easy/possible to duplicate the code into a development environment. if it is, simply running the upgrade and testing might be all that's needed.
- Is the upgrade needed? Are there features in the new version that the client can't leave without? Any security issues (many times Magento provides back-patches as well)
As far as the template is concerned, from previous experience I can tell you that it barely breaks, unless the developer went crazy on the template coding (Which should be in blocks anyways).
My 2 cents :)
