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quick update from 1.5 to....most recent? (2.2 or better ? :S )

Hello guys!

First of all, I would like to say a big "thanx" to all of you for your precious advices around android. I have learned many interesting this zapping around threads. However, I have a vital question...
I have HTC Magic 32 A (non-google) since the stone age. I got tired with 1.5 version and I would like to upgrade to whatever best I can have. However, I am not really sure what is the "best". My definition is a quick OS, fully functional and supporting all the apps.
My real problem is, since I have been through many tutorials, that I have never done anything on the phone in terms of upgrade. It is still with the primitive pre-installed version. In many threads I read about rooting it, somewhere else it was stated that it would be better, if I tried to upgrade directly from 1.5. On the other hand I've plenty of users with 1.6 already installed, the latter are still complaining about several problems of upgrading and so on....
On top of that I have downloaded a bunch of applications and I have many SMS on my phone and some data from applications which I cannot afford loosing them, a.k.a. I need the most reliable backup programme (if any).
So... How may I fully backup my phone and the upgrade it to the most recent version, while transferring (if possible) all my apps and their respective data?

Thanx for reading,
T3rmy
 
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