Before you upgrade your instance, take the steps described here (such as backing up important data) to help ensure that your upgrade is successful.
The jiveHome directory is the place where versions prior to 3.0 store a number of things about your environment. The database connection information is stored there, as well as logs, cached attachments, your license file, and the local system database files (if used). You should back up this directory before upgrading.
You should back up your database before you upgrade. For now, the best way to manage database backups is to follow the recommendations of your DBA or the recommendations of your database software. There are a number of tools built in to various databases. Here are a couple examples:
There are many tools for each database; pick one that suits your environment.
Before starting your upgrade be sure to remove any plugins you've installed. For those plugins that aren't compatible with the version you're upgrading to, you'll need to separately upgrade your plugin code (or get upgraded versions of the plugins from their developer), then install the upgraded versions after you've upgraded to this version.
For more on managing plugins, see Adding and Removing Plugins.