Backups 1.7.x to 1.7.x+1 should be really safe. Stable branches should be just that - only bug fixes and security patches. And 1.7 has lots of known problems. You would be much better with 1.7.1
However, you are right to be cautious about upgrading mid-term.
The safest thing is to copy your entire Moodle site (that is, the database, code folder and moodledata folder - remember to update config.php when you do). Then try upgrading the copy, and testing it after the upgrade. If that works, you can update the real site with confidence.
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