I have mot compiled or signed the FDriod distribution and cannot vouche for it. However I have been in contact with a developer at FDroid on some build related questions, and I have no reason to believe that their distribution is evil.

If the FDriod distribution is signed with a different key than their previous version you can only upgrade by uninstalling and reinstalling. Keep in mind that you MUST make a backup before uninstalling (You should always do that anyway)

The distribution found here and on the Google market place are the officially signed ones using the same key since the initial release and allow you to seamlessly upgrade. Those I can vouche for.