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To upgrade I followed these steps:
backed up config, and kept the original copy in /conf/
kept back /plugins/ /themes/ and /uploads/ as well
Went to /utility/update. It says "update successful" but the plugin for jsConnect says 1.0.3b despite my deleting that one from the plugins folder and replacing it with the latest version (1.5.4).
It also doesn't rewrite URLs despite the $Configuration['Garden']['RewriteUrls'] line being deleted and my nginx being configured to rewrite them.
If I copy the config-defaults, add in my database information, and copy the 3 "installed" lines from the previous configuration, and then go to /utility/update, it says successful. But then I get 404 pages for my forum.example.com page, /discussions. /dashboard works and says "vanilla is installed" but that's all that seems to work.