Updating my desktop to 8.1-RELEASE from 8.0 was pretty straightforward. I used the following steps

• Made a backup and verified that it can be restored. I cannot stress enough how important that is!
• Using csup I updated my kernel sources, using the following supfile;

*default host=cvsup.nl.FreeBSD.org
*default base=/var/db
*default prefix=/usr
*default release=cvs tag=RELENG_8_1_0_RELEASE
*default delete use-rel-suffix
*default compress
src-all

• Updated my kernel configuration. Based on the changes in the GENERIC kernel from 8.0-RELEASE to 8.1-RELEASE, I changed options COMPAT_IA32 to options COMPAT_FREEBSD32 in my kernel configuration. Additionally, I added options INCLUDE_CONFIG_FILE and device vlan to my kernel configuration.
• Ran make buildworld and make kernel as root from /usr/src.
• Rebooted into single user mode.
• Mounted /usr, /var and /tmp since these are seperate partitions in my setup. Do not forget to make the root filesystem writeable with mount -uw /.
• Ran mergemaster -p.
• Ran make installworld from /usr/src.
• Ran mergemaster -i -U.
• Rebooted into the the newly upgraded system.

Because this was a minor version update, I did not rebuild all ports.