I looked at the documentation for doing an MT 4.0 upgrade (http://www.movabletype.org/documentation/upgrade/) - this documentation seems very simplistic, however I see nothing on how to upgrade to MT 4.1 - I am also not sure I would follow the 4.0 upgrade instructions, insofar as schema differences are not addressed, configuration differences are not addresssed, etc. Is anyone willing to suggest a bare outline of an 'upgrade' process from MT 3.2 to 4.1? There ARE schema differences, just to begin with. I ran the 4.1 'Import' function which happily reported 'all data imported successfully' - which was not true. I can manually insert data from the 3.2 database backup I have, but I would like some assurance that this may actually work. There are for example more templates in 4.1, some of the template_name values don't match (one is lower, the other is uppercase..). Any sort of suggestion would be appreciated. The fact that the software is open source should not mean the upgrade is not supported, right? thanks, L. Evensen

The upgrade process to MT4.0 and MT4.1 is identical. Almost all plugins built for 4.1 should be forward compatible with MT 4.1.
As for schema differences, this too you should not have to worry about as schema changes are migrated for you and should not disrupt existing plugins.
Unlike other software packages, WordPress for instance, Movable Type uses an abstraction layer between the plugin and the database. In layman's terms, this means that no plugin executes SQL directly and no plugin is directly dependent upon the underlying schema. As long as we keep the API the same, the plugin and the schema can change willy-nilly and it won't matter.
As for how you should upgrade. I would follow the instructions outlined on mt.org/documentation/upgrade - since that is the procedure we use to test the various upgrade scenarios our users might encounter. This process is supported and we will help you get it all sorted out.
Import/Export is a useful tool, but it is not a standard upgrade technique. You honestly should be able to copy your MT4 source files over your MT3 source files, login to MT, and initiate the automated upgrade process. If that does not work, please let us know so that we can fix it!
After copying the files of MT 4.1 to the older version and then logging again to MT, I am redirected to mt-upgrade.cgi url but its a blank page and nothing happens after that.... I am using SQLite database....
You have to have set mt-config.cgi to connect to your (old) database, though it sounds (to me ) like you have, that's how MT knows you need to upgrade (presuming it uses mt_version in the DB). I've seen similar postings regarding Install on Windows; and the first time I tried to upgrade, it failed. Make sure that your Blog settings URL root are configured to point to the folder you're running MT in now