The update will break the gallery; however there is a workaround. Before you run the upgrade from http://<host>/gallery2/upgrade, you need to add the following symlink
ln -s /usr/share/php/Smarty /usr/share/gallery2/lib/smarty
If you have already run the upgrade, you can still just add the symlink and it will work. I only say to add it before, to minimize the system check errors.
After the symlink is added, the upgrade system checks detect 3 files missing (2 documentation files and a jar file, g2_db2.jar) and 2 modified (Smarty_Compiler.class.php and modifier.debug_print_var.php). These do not seem to present an issue.
As far as I can tell, everything is working after the symlink was created.
Jason Dickerson