If you want to keep your data, goto the Ubuntu site and search for
your upgrade version, I upgrade from 7.10 to 8.4 beta and it went very
smooth.
I would assume it would be easy, but I tried to upgrade 6.0 to 7.04
and that was a disaster. So good luck, alway backup any data.

I bought this PC with 5.04 installed very recently and there is no
data on it I wish to retain.
I know my dialup modem will work with 7.10, (it wasn't happy with
5.04)the members here helped me sort that out last week so I wish to
go with the 7.10 install now.
I appreciate your recommendation about 8.04 but I'm in no rush to get
the latest toy, maybe after I learn how to fly Linux.
Any thoughts about partitioning?

create a swap directory with a gig or two a root / with 5-6 gigs
and /home with the rest would be my take.

this leaves the option of a fresh install and maintaining all your data
in the future

Am I right that this is an older computer with less room on the hard
drive? If so then use it all.

I do have two computers, an old Cel500 which has windows on it but
for my first Linux project I'm wishing to install 7.10 on a newer P4
2.6, 256mb ram, 40gb hdd. This system came loaded with 5.04 and my
dial up modem wasn't happy with it hence the move to 7.10.
Thanks, I was hoping the "guided, use entire HDD" partitioning option
would be OK as with my VERY limited computer skills anything more
complicated would likely get screwed up just as did my attepts at
installing windows.

Tell it to take the whole drive. However, you have dial up and there will be
over 200 updates to install. The good point is that the new version is going to
be out at the end of the month. If all goes right. You may want to hold off till
the new version is out and save time to install all those updates. Not to say at
the least save time or be on line over night to install all those updates.

You were OK until 7.04 Fiesty Fawn but 7.10 Gutsy Gibbon needs at 383 mb
RAM at minimum, so you need to upgrade your RAM above that 512mb at least.

I completed the istallation of 7.10 before I read your post but it
went VERY smoothly :), compared to installing *expletive* windows
Ubuntu is a walk in the park for a novice anyway.
So far I have only attempted some harmless surfing and email and I'm
delighted to report my dial up internet speed is FASTER, WOOHOO :)
than it would be on my Cel500 and Win2000.
Despite having only 256mb memory my system seems to be working fine,
so far........
I half expected Ubuntu to demand a truckload of updates the first time
I got online but it didn't.
During installation it wanted to install security updates but could
not as my dial up modem was not configured at that point so it said
that could be dealt with later.........

I'm delighted that the Internet speed problem
has resolved itself. I'll confess to being a little curious as to the
cause, but it's not worth investigating a solved problem.

Some larger applications may require more RAM, as Ian suggested. But
you should be OK for a while.

Let me suggest that you install a firewall. You should do this before
anything else, even before downloading the security updates. It's
easy to do, and will give you a bit of experience with the Ubuntu
software installation process.

I recommend "Firestarter". It's small, easy to install, and trouble-free.

Step 1: Make sure you have the right software sources enabled:

-> Select "System" | "Administration" | "Software Sources". You will
be asked for your password.

-> On the "Ubuntu Software" tab, make sure that these lines are checked:

* Canonical-supported Open Source software (main)
* Community-maintained Open Source software (universe)

and, optionally:

* Software restricted by copyright or legal issues (multiverse)

You should probably leave "Download From" as "Main Server". Click
"close".

Step 2: Find, download, and install "Firestarter":

-> Select "System" | "Administration" | "Synaptic Package Manager".
You may be asked for your password.

-> Click "Reload".

-> Click "Search". Enter "firestarter" (no quotes) in the search box,
and click "Search". It should find only one package; click on the
line and read the description.

-> Right-click on the package line, and select "Mark for Installation".

-> Click on "Apply" (in the top menu). It should download and start
the installation automatically. The default options should be the
right ones: just make sure that the detected "network device" is your
dial-out (ppp0) device.

Later, when you're installing all those updates, you'll be protected.

I'll try your firewall suggestion but as I've never had a firewall
before and know nothing about them can you tell me in what ways it
will affect how I use my system?