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A few notes after upgrading to Magento 1.8.1.0 from 1.7.0.0.

Make sure you backup your Database and Magento source directory first! My first upgrade attempt using Magento connect (via SSH) failed, The following error appeared when trying to load the site

“Call to a member function rewrite() on a non-object”

After googling the error and trying a few suggestions the install was still broken so I restored from backup and tried again. This time I followed the following steps

1. Remove cached files from /var/cache and /var/session

2. Restart memcached (if being used)

3. Sync mage

./mage-setup

./mage sync

4, Run upgrade (with force switch)

./mage upgrade-all –force

5. Reset ownership and permissions on all files and folders.

Magento loaded without error.

There are no major database changes between 1.7.0.0 and 1.8.1.0 so you can restore your 1.7 installation and switch between the two versions quite easily if you need to do any debugging etc.