I did the update and repartitioning coming from Fairphone OS 1.3 (with a first edition Fairphone) using a preview release of 1.6.
Before I made sure to use the backup functionality in the Fairphone software, which backs up to the external SD-card (which I use). To be sure I copied the backup to my local computer. Afterwards I did the software update (with factory install because I needed to install everything anyway after the repartitioning).
After booting into the new software I use the Fairphone updater to select the Partition Upgrader. This was non-responsive a few times, which is a known issue I heard from Fairphone development. After some patience I could select the Partition Upgrader, which went fine and took about 10 minutes I think.
Afterwards I made sure to install GApps the usual way and restore all data from the cloud by logging in (mail etc.). If you don’t use GApps, this step is not necessary off course. For all other programs I used the backup from the backup tool, which saved it on the SD-card. After restoring I could delete the files from my local computer.
The process went very smooth, once you know how to restore data after repartitioning. Very pleased with the upgraded space for applications!