[upgrading to premium, what happens to caches?]

No, the files in your gps will not be automatically upgraded. However, on a plus side you can download GPX files which have tons of info (basically the cache page without attributes)

[New to / refound geocaching, questions, and intro.]

Might want to check out this link -> http://www.geocaching.com/gps/device.aspx?id=109

[Backpack suggestion?]

I use a Dakine Heli Pro (see http://www.dakine.com/snowboard/packs/snow/heli-pro-20l/ ) Used to be my snowboarding pack and converted it into a cache pack. Has a bladder and all is covered and zippered so it does not get dirty. Has tons of compartments to hold stuff and has very comfortable shoulder straps.