Jeff,
If you email subscriptions@genuitec.com they can provide information and documentation on handling large scale upgrades and the like. We are making enhancements in 5.0 for out enterprise customers as deployment, updates and management have all become a big issue for them and we are going to address them.
Additionally the update manager can handle updates that are equivalent (e.g. 4.1.0 -> 4.1.1 -> 4.1.2, etc.) as well as compatible (e.g. 4.0.0 -> 4.1.0 -> 4.2.0). However it’s important to note that as MyEclipse advances it’s versions can require new base versions of Eclipse (3.0, 3.1, 3.2) that are not easily upgraded and sometimes will require full clean reinstalls due to plugin and library incompatibilities and in a few rare cases non-upgradable (Due to how versioning is handled for milestone releases under the Eclipse project).