Fortunately I do make backups. And that helped when I was updating a template recently and overwrote all my nice little adaptaions and customisations.
It would be nice if the templates now included an updater, as is already the case with Gantry. I appreciate that any updater would overwrite files, but perhaps this can be overcome by adding a new css page called mychanges.css which is where all customisations can be added and which would never be updated. I do something like that now and it helps me not to loose too much stuff.
Is this a good idea? I'd appreciate some pros and cons. Or other alternatives which would make changes look like overrides which are retained during an update.
Joomla didn't even contemplate an auto-updater, you have Nicholas K. Dionysopoulos of Akeeba fame to thank for that.
It has come a long since J17 at which stage Gantry would load reliably but not the Joomla updates themselves. As of J2.5.3 I've been able to auto-update to J2.5.4 reliably.
We've seen some very odd issues with the auto-updater. For now I'll stick to the manual upgrade of the template.
As for losing my php hacks, overrides and CSS change that's not a problem anymore as I've incorporated the procedures necessary to preserve those modifications early into my workflow for developing a website.