You almost have all the steps:
Step 1: Backup your current moodledata and database (mySQL typically, but I am not sure what you might have.)
Step 2: Figure out if you have any special add-ins that "someone" might have installed. (Goto Site Administration, Plugins, and look for "Additional".
Step 3: Figure out what theme you have. If the someone added a special theme, this could present problems when you upgrade.
Step 4: Rename..., yes, do this.
Step 5: Extract..., yes, do this.
Step 6: Copy your old config.php file to your new moodle.
Step 7: Reinstall any plugins that were in your old moodle to your new moodle.
Step X: No need to do anything with you old moodledata folder.
Step 8: Hit the site..., yes, do this.
My guess is that add-ins might give you the most trouble.
Others here on moodle.org might want to provide some additional things to do in my list.