I want to make sure that I understand this right.

I have done all the backup of the database and the site to my computer onto a disk.

My site is on my main domain name like mysite.biz

So I need to do the following:

1) Make a new separate database for the new version.

2) Then upload the old database into the new database.

3) Make a new directory like /test-site/ like this mysite.biz/test-site/

4)Upload the new version of zen cart into the /test-site/ then make sure its working correctly.

5) Then upload the new version of zen cart into the main directory (mysite.biz) then configure both configure.php files that can connect to the new database.