"-) Can I update Mozilla by using the tool "smart update" or something similar or is it better to download the complete new package?"
I have never tied to use the "smart update" so I cannot compare the two methods. I can tell you that downloading the source from Mozilla.org and compileing it works fine (note that I havn't tried 1.6 yet)
" as for the latter case: How do I make sure that a) my e-mails settings and messages are preserved and eventually b) I do not have to go into linking java lib and flashplayer lib again?"
I have never had that problem. The Mozilla upgrade always preserves my settings. Just to be sure I always back up my settings anyway. All of your Mozilla files are in the /home/user/.mozilla directory tree. Just copy /home/user/.mozilla and all of its contents to /home/user/.mozilla.old and you can always recover from any Mozilla install screwups.
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Steve Stites