To upgrade, you will be asked to replace all your current FILE edits with new ones.
This is because code has so radically changed, that it would be too hard and too time consuming to manually patch each line.
All database stuff, apart from the SETTINGS (Battle Options and Items Options), will be rescued in the convert.

Reason why I cant transfer settings is that I would have to tamper with the datastore, which I have bad experiences with in the past