Hello
Welcome to site.
If I am not wrong, when you install a newer version of .NET, the old one would be removed. So you don't have to worry about removing it. Or if you want to remove it first before installing the new version is fine too.
As for ROM upgrade, go ahead and do it. All your programs will be removed but you will still gave the basic applications like phone. What I mean is that your phone will be just like when you first bought it.
Hope that helps but if you need more information, feel free to look at my site (
Eten Blog dot Com: Making Windows Mobile Life Better) which caters to users such as you.