I am using Proxmox installed on Debian linux amd64. Always make a backup of important data. I take no responsibility for anything.
Upgrading Proxmox is very easy - however it can stop Windows using VirtIO drivers from booting. So - I recommend taking following steps:
1. shutdown VM,
2. change bootable disk to IDE,
3. upgrade Proxmox,
4. check if Windows is booting properly - if not, try to disable all virtio devices (remember to write down MAC adress of NIC!),
5. after shutting down VM add new small VirtIO disk e.g. 0.1GB,
6. add CD-ROM with mounted VirtIO drivers (http://www.linux-kvm.org/page/WindowsGuestDrivers/Download_Drivers),
7. boot Windows, install drivers, try to format new disk to check whether everything is done,
8. shutdown VM, remove added disk, change boot disk to VirtIO. Done.
Upgrading Proxmox is as simple as executing:
apt-get update apt-get dist-upgrade reboot