How do you upgrade from one nightly to another?

The codex states the instructions only work for 1.2, so if it’s a different process of upgrading from one nightly to another, what is it? I have backed up all my files – do I really need to back up my database? The database only has test posts that I don’t really care for.

What you need back up is a little confusing anyway – one site says, back up any files you need (that narrows it down) or delete all the files – which is it?

Please advise.

Thank you