To Lion and Fusion 4

Looking around it seems like if I want to upgrade from Snow Leopard to Lion I also really need to go from Fusion 3.1.3 to 4.x.

Am I thinking correctly?

If so, do I go from Fusion 3.1.3 to 4.x first and then Snow Leopard to Lion or do I go to Lion first.

Here's what I am thinking.

1.  Backup system.

2.  Upgrade Fusion 3.1.3 to 4.x.

3.  Make sure system is stable.

4.  Backup system.

5.  Upgrade from Snow Leopard to Lion.

I'm a newbie at both of these updates so am a bit nervous.

Questions:

(A)  Is there a better process?

(B)  Is Backup via Time Machine sufficient or do I need to do special backups for virtual machines?

(C)  Should virtual machines make it seamlessly through this process and run fine when done?

(D)  Have a 4 GByte system.  Am I likely to be happy or sad when I am done?

Any thoughts appreciated.

Thanks.

Paul