Upgrading Litecoin doesn't affect the wallet located on your system. It is, however, good practice to backup you wallet before upgrading, just in case something odd happens with your system.
If you have a version of the Litecoin-Qt software running, simply go to the
File > Backup Wallet menu and specify a location where you want to backup your wallet.
The file itself is called wallet.dat and is located in
%APPDATA%\Litecoin\wallet.dat on Windows systems, or in
~/.litecoin/wallet.dat on Linux systems. You can manually back up the wallet by simply copying this file somewhere else, preferably to offline storage such as a USB drive.
Once you have made the backup of your wallet file, simply install the new version of the software.
The installer will not edit the wallet.dat file; when the updated client starts, it will upgrade your wallet file to the latest version--this is why it is useful to back up your wallet first. Your private addresses will remain untouched and your balances will remain the same.
Remember, always protect your wallet with a passphrase! There have been cases of people not remembering their passphrase, so make sure the passphrase is something you will never forget! There are trojan viruses out there that simply try to upload your wallet file to a remote location where hackers will instantly have access to your funds if the wallet is not passphrase protected.
Location of the Litecoin data directory
|Operating system||Default data directory location||Typical path to configuration file|
|Mac||$HOME/Library/Application Support/Litecoin/||/Users/<username>/Library/Application Support/Litecoin/litecoin.conf|
|Windows||%APPDATA%\Litecoin\|| XP -- C:\Documents and Settings\<username>\Application Data\Litecoin\litecoin.conf
Vista, 7 -- C:\Users\<username>\AppData\Roaming\Litecoin\litecoin.conf