The 2.8 update process will completely wipe your 2.7.X user filesystem. No matter what hacks you've installed, with one very important caveat: /mnt/protected
They need /mnt/protected to have enough free space to conduct the upgrade. If you've been stashing goodies there you'll need to clean it up (time for a 4GB CF card perhaps?)
Personally I would have a preferred a downloadable upgrade tar file but re-installing all my ported goodies will be a good thing, help make sure I still know how to install them.
I believe M is still hand building the shell hack into user accounts, for which everyone with it owes him a big "Thank you!" as otherwise everyone would still be waiting for iRex to finish MyIrex to get the patch configuration ability.