How to know if the new release is installed, as root:
osso-product-info
=>
OSSO_PRODUCT_HARDWARE='RX-34'
OSSO_PRODUCT_NAME='N800'
OSSO_PRODUCT_FULL_NAME='Nokia N800 Internet Tablet'
OSSO_PRODUCT_RELEASE_NAME='OS 2008'
OSSO_PRODUCT_RELEASE_FULL_NAME='Internet Tablet OS: maemo Linux based OS2008'
OSSO_PRODUCT_RELEASE_VERSION='4.2008.30-2'
OSSO_PRODUCT_WLAN_CHANNEL='ETSI/EU'
OSSO_PRODUCT_KEYBOARD='<unknown>'
OSSO_PRODUCT_REGION='<unknown>'
OSSO_PRODUCT_SHORT_NAME='Nokia N800'
OSSO_VERSION='RX-34+RX-44+RX-48_DIABLO_4.2008.30-2_PR_MR0'


Remove/Comment chinook entries before upgrading. At least for me it solved some conflicts.

Another way of freeing space is having a look at the biggest installed packages:
The size needed.. good question. From my earlier post:

So you will need 14.4MB to download the .deb which will then be preinsted, unpacked, postinsted and then the old files not existing anymore will be removed. In the end, you gain 28.7Kb.

Probably a preinst script is puting the tablet in a non-working state, then it's unpacked and it fails if not enough size, which is normal. But then you are in a non-working state...
Could also be a postrm script from the older version which is called before the new preinst

I upgraded through ssh and got disconnected when icd2 restarted. I was a bit scared but ssh reconnected by itself a minute after.