definitely upgrade. not only it fixes a lot of bugs in pr1.1.1, but it also allows access to the ovi store (not that there's too much in there at the moment but... ). not so many problems with it, a lot more with 1.1.1. also, 1.1.1 lacks qt4.6 required for new apps, so..

if you do it OTA (simplest) it might take a while. you don't need to uninstall anything and all your settings are kept.

if you flash it it's gonna take less, but you will have to reinstall your apps.