Thank you so much for your quick answer!
<<<<<You will need to copy any images you put in images/headers and remove the three default ones (if you are not using them) and
any other graphics you may have put in the theme folders.>>>>>>
Okay, what other graphics would I have put in theme folders -- meaning where would they be displaying? -- and how would I have done that? Heck if I can remember!
<<<hopefully someday Flynn will update things so you can store things in the uploads folder>>>
This makes me remember that I've never been clear about where images are residing. May start another thread on this after searching a bit.
<<<plugins are a wordpress issue, not the themes>>>
Duh, silly me, I knew that.
Thanks again, JD! Off to backup and start the update. Think I'll update to the latest Wordpress first. Why not just go crazy getting up to date?