Assuming you copy over the config.php file/information from your original install, the new version will be able to access (and perform some updates on) your existing database. It's a good idea to backup your database for safety (though I'm horrible about doing this myself), but otherwise there's no extra step for getting the new version of Moodle to use and recognize your existing database... the information is in your config.php file, and your sql database isn't located in the /moodle directories, so it doesnt' get deleted or altered just because you replace those files when installing a new version.
Hope that makes a modicum of sense
John