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This is documented in the admin guide here: http://docs.openstack.org/developer/swift/admin_guide.html#managing-the-rings

The important part is this:

Swift 1.6.0 is the last version to use a Python pickle format. Subsequent versions use a different serialization format. Rings generated by Swift versions 1.6.0 and earlier may be read by any version, but rings generated after 1.6.0 may only be read by Swift versions greater than 1.6.0. So when upgrading from version 1.6.0 or earlier to a version greater than 1.6.0, either upgrade Swift on your ring building server last after all Swift nodes have been successfully upgraded, or refrain from generating rings until all Swift nodes have been successfully upgraded.

...so yes, you can upgrade seamlessly, but you've got to be very careful about the order you do it in. :)