Don't worry about the upgrade. If you follow
ALL the directions, you should have no problems.
mfphoto1 is absolutely correct about Pocket Backup Plus. You should know that if you do this, when you restore, you will get an error message regarding the restoration. Ignore it. You should also know that file structures are different in 2003 than they were in 2002 and need to be converted. I don't believe a backup, evey PBP will do this. Which is why.......
Dell suggests you sync everything that can be synced. Then, after you do your upgrade, reconnect using "Guest". Everything you synced to your PC will be synced back to your Ax and at this time, file conversions will be made.
Couple of more things. First, if you do use PBP, do not restore everything. In doing so, you will be restoring 2002's registry over the top of 2003's registry and I suspect you will be in for a rude surprise.

Second, don't use PBP to restore applications as you will not necessairly restore everything that pertains to that application and you certainly will not write the necessary information to registry. Reinstall the application instead.
Oh, one more thing. At the beginning of the conversion, you will have the option of storing the present configuration. I'd do it, just in case. Doesn't take long and it is a great insurance policy.