No, you log out of you limited user account and update from an administrator account.
Personally I don't trust updating from within iTunes and I always download the installer and save it on my PC before running it.
http://www.apple.com/itunes/download/
As I am rather paranoid, I make copies of iTunes Library.itl and iTunes Library.xml before updating, do this with iTunes closed. But iTunes should make a backup of its own when updating. Unfortunately if you have to update from an account that is not your usual one, it will backup the library of the account you update from, not the one you want.
Added : Actually I may be wrong in my last point. If the backup is made when you first open iTunes and it converts the library, you may be OK. But I would make a copy anyway.
Message was edited by: polydorus