I really needed to migrate from 1.3 to 1.4. I read every post on the internet about this and none of them worked. Some people claim that updating runs automatically, but you ll get only error after error. Please let me know if I m mistaken and I would love to try it myself.
Having said that, you ll have to install Magento 1.4 from scratch. After that you can copy the media folder and then it s when the nightmare begins: migrating products.
You can export products from 1.3, but the CSV file is not compatible with 1.4.
I had to write a script for transforming 1.3 export files to 1.4 import files. Then I could import products to Magento 1.4. But images on the backend didn t work because they are retrieved from cache so I had to correct this. That wasn t easy.
Templates are more or less compatible, a few issues with pagination and other minor changes.
I m not sure how to migrate users yet, but I m using the same technique I used for products. Who know if passwords are easy to preserve, and forget about migrating orders, at least without investing some money on it.