The upgrade should be smooth, however you won't get any magical merge benefits until the merge-info stuff is populated - which doesn't happen until you start using it.
The only tangible benefit of the merge info I've found is being able to see a list of potential merges between two branches and know which revisions have already been merged. It doesn't directly affect things like the number of conflicts that are generated, but does allow you to keep sane when tracking what's gone where. The merges performed before the upgrade don't cause problems, they just show up again as potential merges even though they've already been done.
That said, the merge info is just an svnproperty called svn:mergeinfo, of the format:
/Project/name/trunk:1355-3985,4019,4026-4437,4478,4481
This is the actual merge-info on one of our project release branches and tells us exactly what revisions from trunk are about to be released.
This means that, where you need it, and where you can work it out, you can populate the mergeinfo manually and get all the benefits - that's what we did for the early revisions, above.
It might also be worthwhile looking at reshard.py, especially if the repository is large and on windows. The 1.4 fsfs repository format put all the revisions in separate files in the same folder, windows starts crawling with this after a few thousand revisions. 1.5 sharding groups revisions into separate folders of 1000 each. 1.6 will allow us to combine the old revisions into a single large revision file.