Reading all problems people say they encountered, I’d say : yes, do a full backup.
There’s a Backup and Recovery app that comes with the FP, or you might use a third-party backup tool. I don’t have experiences with these myself…
I read that someone having the Nova launcher installed had problems due to this; disabling third party launchers might be a good idea.
There’s an official list of issues and solutions/workarounds here:
From what I’ve seen yesterday and today, things that merrit attention are:
There have been reports of apps disappearing because they were stored on the SD card. Moving them back to internal storage before upgrading should help.
Yet other people report the phone getting stuck during the update, and have it working again by removing the SD card. So maybe it is best to unmount it and remove it anyhow before attempting an upgrade.
Be aware that the launcher is being updated, meaning that you will loose your organisation of pictograms on the homescreens, folders, widgets (And their settings!), … the home screens will be mostly blank, though the apps should not go away. Also, space on the homescreens is reduced slightly because the app icons have been made bigger (they’re also slightly fuzzy but that’s a purely cosmetic problem).
I hope this helps you upgrade smoothly (or stay on 1.6 if you’re not convinced 
).