Is there a suggested / preferable way of going from one version to the next version ....
This depends on the operating system I guess.
I use linux and the IDE download automatically unpacks in a directory that has the version-number in it. Arduino 0018 installs into arduino-0018.
If you want to keep old versions around I suggest you use the scheme arduino/arduino-<version>
The only problem with deleting older versions are third party libraries that are local to a specific version. Copy them to the new sketchbook/libraries dir to make them available across versions.