Question: My web project (to be launched in a few months) is currently using CakePHP 1.2.5 / PHP 5.1.6 / MySQL 5.0.77.

From a performance point of view, is it a good idea to upgrade to 1.3?

Will it make it easier to later upgrade to the (PHP5-only) CakePHP 2?

Answer: 
I'd say it depends on when you expect to get your site out the door. 1.3 is currently in alpha status and probably won't be officially stable for a while. While the changes being made between 1.2 and 1.3 shouldn't have a huge impact on the overall stability, the new features being put in might still be buggy. The question is, is there anything in 1.3 that you absolutely need *now*?

If you want to release your site soon on an unstable version of 1.3, you need to make sure through a lot of testing that the parts you're using are performing as expected. If your project will evolve over time together with 1.3, let's say over the next 6 months or so, and you continuously keep updating, you'll probably be in better shape. For example, I developed a project on the 1.2 beta and there were a few bugs in `Set`, which tripped me up, but got ironed out 'till the final release.

For a long-term project, I'd prefer the 1.3 branch, while for a near-future release I'd stick with 1.2.5 for now. You can keep an eye on the [Migration Guide](http://code.cakephp.org/wiki/1.3/migration-guide) to avoid API calls that will be deprecated in 1.3, to allow for an easier later upgrade.
i'd upgrade early situation allows. if you haven't you might want to start using the cakephp/simpletest test to make sure things work just fine.

i took my time upgrading from 1.1 to 1.2 and had a lot of 'fun' going through my codes. :)