That's one way of doing it.
Bear in mind that while you're doing the upgrade on the test site, you would need to close your live site, otherwise people will be posting to a database which is going to be overwritten and any content will be lost.
The other way is to test upgrading on a dev site and once you're comfortable with the process and have taken notes about what needs to be done, then you can do it on the live site.
I wasn't aware it would be touching the database. I thought it was just a file overwrite and/or update. If it updates the DB then I can't do it as I had hoped, update the files offline and then just overwrite the files. Thanks for clarifying, Brogan.
Maybe you...but almost every time we upgraded our (large) forum, we needed some stuff tweaked...not the fault of XF, but often add-ons as well as perhaps permission issues, etc.
If everything is perfect from day one...and it's a small forum without many add-ons, you can have a high degree of confidence. For everything else, you should have backups as well as perhaps an expert (from here) waiting in the wings in case you run into issues.