Albina,

Not sure how your web server is setup.  So, the read/write permission will need to be granted to Network Service or whatever other account needs permission to run DNN. 

I took a backup of both my SQL Server database and my site files (everything in wwwroot).  I downloaded, unblocked and uploaded via FTP each of the upgrade packages that needed to be applied.  I was on DNN 5.1.x and needed to upgrade to 5.4.2.  So, I downloaded the upgrade packages from Codeplex.  For each upgrade package, I extracted the contents to my wwwroot directory, then browsed to my site.  The upgrade process would start, and I would receive an output of the upgrade with either success or failure at the bottom.  Ensuring that read/write permissions were granted to NetworkService on wwwroot and all subfolders made the upgrade process go smoothly.  After each upgrade was completed error free, I browsed my site to ensure it was working.  I then proceeded to extract the next upgrade package to wwwroot and repeated the same process.  When all upgrade packages were installed, I took another database and website file backup so I had a set of backups after upgrade was successful. 

Hope this helps. 
Sid