> Can I safely choose to do an update rather than an install?

Even though I have not updated from 8.0, only 8.2 I would say
go for it, the plusside is that you will keep all old and updated programs
the same way as before, configurationwise

> Or can I use Mandrake Update over the internet?

I have never used it so i can't say, this is one side where rpm-based distros IMO
can't compete with Debian-based, I love the easy way I can upgarde a Debian
based distro

> If so, are there any files I should back up to floppy before
> I start?
> 
 You should always back up your important files in case anything
breaks down, it might not be on the software side but on the hardware
side.

/Anders



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