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Terry411Terry411 IDE Project Upgrade

I recently installed the update for the IDE to Spring 12.  When I open an existing project, it asks me to Upgrade it to the newest release.  After the wizard analysis the project, it presents this alert:


"The following project source files have changed on the server and will be replaced with the Spring '12 version.  Click on the filename to view differences between the old and new versions."


When i click on one to the files, it shows me a before and after comparision.  However, the after comparison appears to then miss a lost of the data I must have had locally.  I'm guessing this is because I hadn't updated the locate source files in a while but I'm not sure of that.  


I'm afriad that if I continue with the update, I'll over-write valuble data from the server.  The warning messages don't seem to be clear as to what is being updated.  It doesn't make any sense to me that an update would replace server configurations with local one but I wanted to confirm with the group here before I proceeded.    


I have a handful of customer projects that I need to update and don't want to risk replacing server file with my local files. Is it safe to do the update and if not, how can I update my local files to match the server prior to updating the project?