Conversion is quite simple, I had a very "hacked" board myself and it went off without a hitch. You will lose all your mods on the current board, the only ones supported for the conversion are the attachment mod and the birthday mod.
If you concerned about upgrading there is really no reason to wait especially if you just want to give it test run, to convert a current forum you FTP the files to a new folder. Run the install and then the conversion script. It doesn't change your current files or database. You can then test it, to make it live first go into the ACP and change the script location from your test folder to your live folder. you'll then have to change the old forums folder name to something else and change your test forum to the live folder name. **You may want to consider closing your live forum and rerun the conversion or you will lose posts that are posted in between.
For future modifications I haven't used the update feature yet but the new phpbb3 comes with a "auto updater" specifically for updating phpbb3 if you modify it. The basics are it will examine your files, if they have not been modified it will simply overwrite with the new ones. If they have been modified it will show you the code changes and what you have then give you options on how to proceed. From what I gather on their forum this actually works very well.
I've been using it live for a month now, some of the things that have impressed me so far:
1. Overall the ACP is simple to use and administering users is very easy. For example you can click a users profile and then click "test users permissions" which will put you give you their permission so you can see what they see.
2. It's much faster than phpbb2, page load times for the index are averaging about .09 and I have already made some modifications. Also note that's with all the features turned on, GZIP and I not running anything like memcache. Comparatively my phpbb2 forum was coming in around .25
3. Pure CSS formatting and layout, there isn't a table in sight except where there should be.
4. Extensive user control panel, they can control many aspects of the display. Even what is displayed such as limiting post by the times and sorting them. Friends/Foe lists for PM'ing , rules for PM's.... The list is quite extensive.
There's so much you really have to look yourself.
Things not so great:
1. Permissions are still very complicated but I think that comes with the territory. If anything they could have 'uncomplicated" them for those that didn't need the advanced permission settings.
2. It still lacks basic SEO, titles are a mess, no description.
3. It uses a new URL scheme, if you are currently using phpbb2 you might be aware that the duplication of URL's is quite extensive, this exacerbates the problem because now all you old URL's work as will the new ones. Having said that they have taken some steps to alleviate this if you are installing a new forum but there is still 5 possible duplicates that I can find at the moment.
They have taken some steps SEO wise, Bots now have their own group which in a way is good thing because you can manipulate pages for bots, by default some of the things such as links to search, profile links and the memberlist are denied to bots. Having said that might even be a problem as well because you're flirting with cloaking.