You do not need to upgrade your SQL Anywhere 5.0 databases to use SQL Anywhere 5.5.
If you have databases created with Watcom SQL, you need to upgrade your database to SQL Anywhere 5.0 or 5.5 if you wish to use some of the features introduced in SQL Anywhere. The following summary describes the version you must have in order to use some features.
The Upgrade utility is provided to upgrade Watcom SQL 4.0 databases to SQL Anywhere format. The Upgrade utility is accessible either from Sybase Central or as the DBUPGRAD command-line utility. The following statement at the command line upgrades a 4.0 database file named TEST.DB to a SQL Anywhere format:
dbupgrad -c "dbf=test.db;uid=dba;pwd=sql"
If you wish to use replication on an upgraded database, you must also archive your transaction log and start a new one on the upgraded database.