Upgrading your WSS v2 sites to v3

PJ Hough, group program manager on the WSS-team, comments about upgrading existing v2-sites on Channel9:

We are aiming to make the upgrade experience a very smooth one. There are definitely some new components that you will have to install before upgrading WSS (such as WinWF, the workflow engine), but your sites should all upgrade without any data loss.
You will have the option of upgrading your sites ‘in-place’, or ‘side-by-side’, depending on the complexity of your environment and the extent of customizations that you have made.