I think I discovered part of the secret handshake. I'm making headway with this - instead of failing on first line, I'm now upto FckHtmlEditorProvider_02.00.02:

00:05:05.546 -   Installing Package File DNNTreeNavigationProvider_05.01.00_Install: Success
00:05:05.812 -   Installing Package File FckHtmlEditorProvider_02.00.02_Install:

Stack Trace:

[ThreadAbortException: Thread was being aborted.]
   System.Web.HttpApplication.ExecuteStep(IExecutionStep step, Boolean&

completedSynchronously) +486
   System.Web.ApplicationStepManager.ResumeSteps(Exception error) +501
   System.Web.HttpApplication.System.Web.IHttpAsyncHandler.BeginProcessRequest

(HttpContext context, AsyncCallback cb, Object extraData) +123
   System.Web.HttpRuntime.ProcessRequestInternal(HttpWorkerRequest wr) +379

It actually shows up in a browser and says I'm on version 5.2.2 (73)

But looking at other posts, I'm still a few bricks short of a full load:

00:00:10.758 -   Installing Package File FckHtmlEditorProvider_02.00.02_Install:  Success
00:00:12.059 -   Installing Package File FileBasedCachingProvider_05.00.00_Install:  Success
00:00:12.117 -   Installing Package File SchedulingProvider_05.00.00_Install:  Success
00:00:12.174 -   Installing Package File SearchIndexProvider_05.00.00_Install:  Success
00:00:12.230 -   Installing Package File SearchProvider_05.00.00_Install:  Success
00:00:12.290 -   Installing Package File SolpartMenuNavigationProvider_05.00.00_Install:  Success
00:00:12.365 - Installing Optional AuthSystems:
00:00:12.366 -   Installing Package File LiveID_01.00.01_Install:  Success
00:00:12.539 -   Installing Package File OpenID_02.00.00_Install:  Success
00:00:12.784 - Installing Optional Packages:

Fisrt I'd like to thank Sebastian Leupold for his answers. Success!
What caused the first upgrade to fail? An old version of Friendly URL provider by Infinity.
Who is to blame for this?
1. ID 10T error
2. DotNetNuke - on the modules page they have an "upgrade available". Foolishly I thought that would indicate whether an upgrade was available. They should have put a question mark or said "we don't have a clue about 3rd party modules". Also, poor, little or no documentation by DNN. I think the programmers think - "if it was hard to write, it should be hard to use" or "a new version is coming out next month, no use wasting time on documenting this version". Incidentally about 50% of software you buy has poor documentation. You're not alone DNN!
3. 3rd party suppliers for not providing a way to subscribe to "is there a new version of our module". Here I must commend ActiveModules for actually emailing me about version upgrades.
What caused other upgrades to fail - newest version of Friendly URL Provider 5.2.0.0. I had upgraded another site from 4.9.5 to 5.2.1 without problems. Then the light went on, I remembered is was using FUP 5.0.4.0. So I downgraded the dll and the upgrade went fine. Of course the logical thing to do would be to switch off FUP, upgrade and turn it back on. But I've never had FUP fail before, and this was a Jan 2010 version. How could it go wrong? (I did email Infinity to tell him about my upgrade woes.) This is a free module, and Bruce couldn't possible test every upgrade scenario.
I've read other posts about DNN360 module problems, but I'm happy to report that the latest version 1.04.10 and tabs 3.2.7 worked flawlessly.
One other thing I did was:
USE dnntest;
GO
EXEC sp_updatestats
Also, when I rolled back, I deleted the DNN site directory, then restored it from back up, rather than just unzipping the files over top of old ones. I think the error log files just keep appending, rather than only having latest error but I've not tested this. I use Acronis for backup - which would also allow you to do a full bare metal restore if drive failed or something. But you need the sever version if you live dangerous, like me, and test on production server. I copy site and test update on copy of site, rather than live site.
Hope this helps with troubleshooting your upgrades.