Thanks to all who replied.

I started the installation/upgrade. Before I do anything with the actual "Production" site, I decided to start with a clean 3.2.2 install and work my way up all on a localhost environment. Here's what I"ve done so far:

1. Create DNN322 database and Virtual Directory ( DB322 / VD322 )
2. Installed DNN 3.2.2 from Install.zip in VD322
3. Site installed correctly.

Now I want to upgrade to DNN 3.3.7. But I want to keep 3.2.2 intact, so I copy everything so far :

1. Copy the database DB322 to DB337. (SQL Server 2005)
2. Create new wwwroot folder VD337, and copy VD322 into it. (I have to grant Full Control permissions to ASPNET again )
3. Add contents of DNN 3.3.7 Upgrade.zip to VD337 (which, up to this point contained 322 files)
4. Change the web.config file connectionString to point to DB337. 
5. Launch upgrade which runs correctly except for this error:
   • SqlDataProvider/03.02.03.log 
     System.Data.SqlClient.SqlException: Object 'GSW_GetOnlineUsers' already exists in the database.
        at System.Data.SqlClient.SqlCommand.ExecuteNonQuery()
        at DotNetNuke.Data.SqlDataProvider.ExecuteADOScript(String SQL)
        at DotNetNuke.Data.SqlDataProvider.ExecuteScript(String Script, Boolean UseTransactions)
     CREATE PROCEDURE dbo.GSW_GetOnlineUsers @PortalID int 
     AS 
     SELECT
            UO.UserID,
            U.Username
            FROM GSW_UsersOnline UO
                  INNER JOIN GSW_Users U ON UO.UserID = U.UserID
                  INNER JOIN GSW_UserPortals UP ON U.UserID = UP.UserId

            WHERE UP.PortalID = @PortalID 

Now that I've made a copy of the site and database, and upgraded to 337, I run my site from localhost/dnn337/ but I end right back at localhost/dnn322!! What gives? My VDs are clearly pointing at different folders.

Thanks again

Rad Srag