I did my upgrade by backing up my wp_ tables, modifying the backup script (replace wp_ with wp15_) to create tables called wp15_ and creating them in the database with the existing 1.2 content. I then copied my 1.2 directory and created a new 1.5 directory. I modified the siteurl and home values in the wp15_options table to point to the new directory.
At this point, going to the 1.5 version (though it's still 1.2) of the site should work just like the 1.2 version. When I verified that, I went and upgraded that WordPress instance following the instructions at http://codex.wordpress.org/Upgrade_1.2_to_1.5 . I could then work out any issues I found (like with RSS, etc).
Since I'm the only author there were no missed posts and there were no comments added that I had to worry about pulling over from the 1.2 to 1.5 version.
When I was ready to cut over to 1.5, I modified the siteurl and home url in the wp15_options table to point to the current production directory, renamed the current production directory to another name and renamed the 1.5 directory to the current production name and everything worked like a charm with no outage time or worries during the upgrade.