If you're running standard Linksys firmware, then you can always just use the basic web interface for firmware upgrades - there is no need to worry about Upgrade Mode.
If you're running OpenSlug, you're on your own. ;-)
What Is Upgrade Mode?
Upgrade mode is the replacement to Unslung 3.x and 4.x's Maintenance Mode. Due to lack of source code for Linksys's web-based firmware upgrade procedures, the developement team elected to retire this older (and sometimes fragile) method of code upgrades.
The procedures to install new firmware are covered at RecoverFromABadFlash.
One of the big additions in Unslung 4.x was the replacement of switchbox with a direct pivot_root in the jffs2 /linuxrc. This freed up at least another 1MB of RAM over and above the 10MB or so of RAM that the Unslung firmware already freed up compared to the Linksys firmware.
However, it seems that the removal of switchbox has meant that the firmware upgrade maintenance mode simply doesn't work in Unslung 4.x (it fails for an unknown reason somewhere in the middle of the Linksys upgrade.cgi binary for which we have no source code - so we have no way of debugging or fixing it).
Since freeing up RAM whilst still retaining Linksys run-time functionality is a key goal of the Unslung firmware, then the assertion from the development team is that the benefit of 1MB more RAM for packages is worth the inconvenience of giving up the web-based firmware upgrade system (and requiring the use of one of the other firmware upgrade mechanisms).
(source : adapted from http://groups.yahoo.com/group/nslu2-linux/message/6754)