Difference between an update and an upgrade

[bugsmi0]

SMF Version: SMF 1.1 RC2
The download is not clear on the difference between an update and an upgrade,

install, update, upgrade ? ? ?

which do I need and will the upgrade mess up any mods ?

[Oldiesmann]

install - the complete package (including Settings.php). Use this if you're installing SMF for the first time.
update - the "update" package contains only the files that have changed since the last version (1.1 RC1)
upgrade - similar to the "install" package, except that it doesn't have Settings.php and has upgrade files instead of install files. This can be used to upgrade from YaBB SE or any previous version of SMF.

You will have to re-install your mods after upgrading.

[Robbie van Riet]

Idea, put this explanation also in the FAQ of upgrading .. because it's really confusing which package to choose