A lot of the settings are stored in flat files, however some settings are stored in the database; in order to have a clean import you'll need to drop the table and run the createtables.php script in the install directory, then run the importer again.
From here you'll have to go back and update settings...
Keep in mind that things like forum settings and styles are stored in the database (however you can export your styles and import them back once you've upgraded).
