In order to address a potentially serious (although rare) server startup failure that was recently reported, PostgreSQL version 7.3.4 was released. This release is critical for users of PostgreSQL version 7.3.3, and highly recommended for all other PostgreSQL users. This release, as with all minor releases, does not require a dump/reload to be upgraded.
What about the famous upgrade compatibility problems ?
I never had any problems personally using Debian’s Postgresql packages. Dump db with old version, import with new version.