Yes, the original data from a WUP 2005 or 2006 system will be preserved and brought into WUG V11.

Run the install (on the WUP machine)and and you should see a screen that tells you it is an 'update' rather than 'setup' in the first line. At some point, you should then see a screen where the orginal database can be backed up. When you get the screen that asks about the Web Server, say yes (it will be yes, if WUP has the web server enabled) as you now need the web server for Reports on the console. If using IIS then you can answere No, to the web server.

Note that the database schema has changed, so the DB needs to be updated with some new fields and that can make the DB larger. I've heard that if the DB is already close to the max, this can push it over the 2 Gb limit and if that happens, well, WU won't be able to finish the update or use the resulting DB. Purging records using WUP 2006 and its DB tools before you begin the upgrade or using SQL statements (See KB for more on this).

The Release Notes (KB again) have step by step install/upgrade instructions...

Daniel Donnelly