On prior phones, I've always done the update with the storage card removed. Not sure if it matters or not, just my method. I then re-insert the storage card cuz it has all of my add-ons...much easier to install from there. I haven't actually done this update yet...just lurking and watching oh-so-closely!

What you may want to do is, if you have an Exchange config, completely un-do that first, especially if you are storing the attachments on the SD (I do), and erase them from the SD. I don't really know if it matters much, but I know that one time when I master reset this phone without first doing that I wound up with double attachments on the SD card (different folders).