Got this procedure from a discussion on the Apple Board. It worked great for me. If you have a system that is exhibiting no problems, etc. you may want to give it a try. You can always Achieve Install or do a Clean Install if you have problems or issues.
Fast and painless.
YMMV. Good luck!
1. If you have an external firewire hard disc, check for firmware updates and apply them (e.g. LaCie:
http://www.lacie.com/support/drivers ).
2. Backup your hard disc (Carbon Copy Cloner)!
3. Update all your haxies (e.g. ASM, TinkerTool) or uninstall them.
4. Deactivate StuffIt AVR (StuffItDeluxe only) and NortonAntiVirus and other background programs
5. Remove Startup-items unless you are sure they are Panther compatible
6. Restart and run fsck -y
7. Restart and repair permissions
8. Run DiskWarrior before you update.
9. Did you BACKUP?!
10. Unplug your external firewire drive if you could not find a firmware update
11. Startup from the Panther CD and repair permissions again (most interestingly disc utility 10.3 finds more permission errors than 10.2).
12. Update via the "Upgrade Install" option (After all of these precautions it seems to be safe to use simple update install) HINT: Use custom install to avoid installing languages and print drivers you don't need. Also, no need to install the iApps or IE if you already have the latest versions - deselect the ones you don't need. All of this saves time and disk space.
13. After restart repair permissions
14. Run Cocktail 3.1 Pilot (Caches, Logs and CRON)
15. Force update prebinding (Cocktail or System Optimizer X 4.0.6) and immediately afterwards..
16. Shut-down, wait 2 minutes and restart (no idea why but this seems to help)