Magento 1.8 has been launched. Time to upgrade to 1.8? No wait, the is very new upgrade and make sure all your extensions compatible to Magento version1.8 else you would be in big trouble. here is small checklist:
1. Make sure all your extensions are compatible to magento 1.8 version. If not ask the support team to develop one asap.
2. Any custom coding done on Magento 1.7 and previous versions would be wipped out, so make sure you track all the edits and accordingly make changes before upgrade
3. make sure your Server is supporting Magento 1.8, some people had issues as their servers were not supporting the previous versions of Magento and MySQL versions.
4. Wait until a service pack or updated version of Magento 1.8 is released. This way you would avoid facing lot of new issues which goes undetected in Magento’s testing labs.