Amin's Note

Online Upgrade from CentOS-5/Beta :

We recommend a fresh install, however it should be possible to in-place 
update a machine from CentOS-5/Beta to CentOS-5.0/Final using the 
folloing steps:

step-1) init 3
step-2) yum clean all;
step-3) yum --disablerepo=* --enablerepo=base --enablerepo=updates 
update yum* rpm*
step-4) yum clean all;
step-5) yum --disablerepo=* --enablerepo=base --enablerepo=updates upgrade

For the final step, you should do an 'upgrade' rather than an 'update'. 
The yum man page has details on the differences between upgrade and 
update options. Also, its important to init 3 before doing the yum 
update in order to work around the dbus restart issues that have been 
widely reported. And doing the main update using the newer yum can 
result in upto 4 times faster update speeds, so its recommended that you 
first update yum and rpm.

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Online Upgrade from CentOS-4/Final

The best way to move from CentOS-4 to CentOS-5 is via an installer 
upgrade. However if you must do it online, here are some tips to help:
- Remove as many packages as you can, strip it right back to the 
original OS if possible
- Backup everything
- Disable all repositories, except the centos-5 OS and Updates repos
- init 3
- shutdown as many services as possible
- download and install the centos-release-5.x rpm, which will update 
your yum configs
- run a yum upgade ( not update )

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Online Upgrade from CentOS-3/Final

Online upgrades from CentOS-3 are not recommended. The CentOS Wiki has 
some details and examples from tests done by members of the centos-qa 
team and if you really *must* upgrade a machine running CentOS-3 to 
CentOS-5, I recommend you start with those notes. Feel free to 
contribute your experiences there.