I have recently done this so I thought I would note down the process.
If you want to see a video on the process view this blog post I wrote earlier
The first question you have to answer is how are you going to upgrade the environment, are you going to have a new CRM server. You will need to specify a different database instance from the CRM 4 instance because you cannot have CRM 2011 and CRM 4 running on the same database instance because you can only have one MSCRM_CONFIG database.
I will assume you have sorted out your environment. One important point is you will need to know the url of reports server because you will be asked to paste this in, so you probably want to get this from one of the current organisations already setup on the server.
- Apply the latest rollup to the CRM 4 organisation
- make a backup of the database (you will use the bak file to restore into the new database)
- restore the CRM 4 organisation database (name_MSCRM) to the database instance you are storing the CRM 2011 databases.
- Open the Deployment Manager and choose import organisation.
- select the database instance you restored the CRM 4 database
- The restored CRM 4 database should appear in the list of potential organisations to restore.
- You will be asked how you want to convert the users from the old database, unless you are on the same active directory domain then you probably want to do this manually and assign yourself as an Administrator user
- it will then take quite a long time converting the database from CRM 4 to CRM 2011