This came up as a rather frequent problem, so I'm posting this to avoid any further issues with upgrading to latest v3.2
The upgrade pack you can download from our site refers only to upgrading from 3.1 -> 3.2, as clearly stated in readme.txt
Quote:
Before starting, we strongly recommend making a backup of your phpWordPress site (Administration -> Backup Manager) prior to running the Upgrade.
While every attempt has been made to ensure that Upgrade is bug-free, due to the number of different hardware and software configurations around today, it is impossible to guarantee that it will perform error-free on your particular system. As a result, it is strongly recommended that you make a backup before trying an upgraded version of phpWordPress.
The upgrade scripts convert only from phpWordPress 3.1 or higher to most recent version. If you wish to upgrade starting from a version prior to 3.1, you will need to first upgrade to 3.1 version.
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If you have 3.0, or 3.0.1 versions, first upgrade to 3.1 or 3.11 and then run latest upgrade script.