Yeah that's the safest approach. That said, if you're confident that your backup set is good or if your content set is so large that having two copies available at the same time is impractical, you could do a direct in-place upgrade of the repository (still using a separate out-of-place upgrade for the Alfresco binaries and configuration - that has to be done no matter how you upgrade the repository).
Being rather risk averse, I prefer copying the existing repository (by restoring the backup to a new database and alf_data directory) and upgrading the copy instead, since it makes rolling back trivial in the unlikely event that the upgrade fails (you can simply restart the old version of Alfresco and it'll connect to the old, non-upgraded version of repository and continue from where it left off).
Cheers,
Peter