I have now updated 3 PCs to KDE 3.4 in Mepis Linux with no problems. I just did (from debian unstable)
apt-get install kdebase kdm
and took the default on all the choices ( retain current settings)
You can try the package maintainer's settings on kdm if you are adventurous, but I think it's best to retain your current ones on all choices.
The upgrade to KDE 3.4.2 will remove skype and a few other things you may want ... look thru the removed list (best to save a list of the removed packages in a text file before you accept the upgrade). You can get a .deb for skype from www.skype.com.
If you want X.org, just do
apt-get install xserver-xorg
and allow xorg to copy your settings from X11 to xorg.conf
If it doesn't work, there's a config utility (I think xorgconf at the shell, may be a little different), but it worked fine for me.
You can then look at the few packages that are kept back (around 20-30) ... it's safe to upgrade all but 4 or 5 of these ... just make sure not to remove anything you need.
There are threads on this at www.mepislovers.org
.... but I think it's quite safe to upgrade to KDE 3.4.2 from debian unstable now ...