Do we install PT8.5 on existing release of PT for an upgrade?

Hi All,
This is our first upgrade experience and we are a bit confused with the steps we should follow to upgrade PT. We are on 8.47 and planning to upgrade to 8.50. After reading the installation notes and other material, there is a bit of confusion on the first step. Which of the following steps is a better/correct way to follow:
1. Install PT 8.5 on top of our current PT 8.47 (DEMO)
2. Install Change Assistant 8.5
3. Use the delivered Upgrade template in CA 8.5 to upgrade a copy of Production Database to 8.5 (Of course we will take into consideration our own customizations)
4. Repeat step#3 for various tests and for the final move to production.
OR
1. Use the delivered Upgrade template in CA 8.47 to upgrade current DEMO database to 8.5.
2. Follow the same procedure for a copy of Production Database (Of course we will take into consideration our own customizations).
Thanks much in advance.

I opened a case with Oracle and this is what I was told:
1. Install the Media pack CDs for Peopletools 8.5 in the existing DEMO Database/Environment.
2. Configure Change Assistant, App designer etc
3. Upgrade to 8.5 using the change Assistant Template.

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