I have just installed Atahualpa 3.5 by directly upgrading over v3.4.9. Importantly, the previous installation was running as a BuddyPress integration - the installation was essentially straightforward.
As a precaution I first used the new export facility in Atahualpa Options to export the previous settings to an external file, but this proved unnecessary as the upgrade automatically picked up all but one of of the settings made in Ata 3.4.9.
You can view the site at http://waterwaywatch.org
There were only two adjustments to make:
1. I have embedded a logo in the header. The name of the logo was carried forward in the settings but the logo file itself needed to be copied over from themes/atahualpa349/images to themes/atahualpa350/images.
As I remarked on the occasion of upgrading from Ata348 - > Ata349, it seems to me that it would be a relatively simple enhancement to have future upgrades perform this transfer automatically (after if the name of the logo file is transferred why not also move the file itself?).
2. As mentioned, my site is integrated with Buddypress and the upgrade broke that link. However, all that was necessary was to follow the simple instructions in the BP Compatibility Options in Appearance. All this entails is two clicks to copy the BP template files automatically to the new theme. It was not necessary to change the templates as is sometimes necessary with some themes.
Congratulations on a near flawless upgrade.