1. Read the release notes
First of all, make sure you read the release notes before upgrading. They are not specific to DTC itself, but you will find lot's of valuable information there on how to upgrade. These are available here:
http://www.debian.org/releases/stable/releasenotes
2. Main principle
Just upgrade as described in the release notes. In general, if Debian is asking if you want to overwrite the configuration files of a given program, answer YES to it. Once it is done, you just need to restart the DTC shell installer as follow:
/usr/share/dtc/admin/install/install
which will reconfigure all the daemons as needed (and redo the modifications overwritten by new configuration files). Note that if you had the version 0.29.17 already installed in Etch, you do not need reinstall DTC: the version you have is exactly the same as the one in Lenny, the only thing that changes is that the package has been signed with the Debian repository key.
If you want to keep things as they are, and use the Debian version of DTC, which we current call the stable version, then you can also remove the GPLHost repository from your apt sources.list.
