I usually update all the files that are being updated. I also generally make a separate file for each category (sectional, TEC, plates, software, etc.) so if something goes wrong with one of the files I can just replace that file. In addition, making several smaller files lets me not "waste" so much download in a rare instance my download gets interrupted, and I have to restart it. This isn't really necessary, but it would be a bit more convenient for myself, and at least one other that makes several smaller update files instead of one large one.
As for overwriting a newer file with an older one, I would first off think I would be aware of what's on my drive and what I want to upload. But since you mentioned it, it might also be nice if, in the update process, the software would check and ask us if we were aware we were attempting to replace newer material with older material.