Unless you build custom firmware, all your packages will go away when you perform a system upgrade. You need to install all the packages again manually. While I rarely upgrade my firmware, I suggest you take the extra time to document all your packages so you can create a single comprehensive OPKG string (or script) for future upgrades..
You have the option to keep the config or to set it to default. There is a checkbox in the upgrade window.
If you preserver your config and the parameters of a package change you may have issues. While I make backups, I also use WinSCP to save clear text copies of the \etc\config folder and anything else I have modded. They are great reference and can be used for cut and paste, if not in their entirety (ie DHCP Static leases, etc).
I would not suggest you upgrade your production remote devices remotely.