Well, I guess my first question is how to find what version I'm running, because I can't find it in the usual places. Secondly and most importantly, the template I am using is a color/picture modification of the GIALLO template. If I upgrade, will I have problems with this template, or should it integrate smoothly?
There is a theme upgrade guide in the docs folder, you will need to follow thoses steps to get your theme to work properly in 1.3. View the source of any page, and there will be a comment in the html displaying the version number.
You also see the version number at the top of the config page (except in version 1.0)