When a database is upgraded to SQL Server 2008, the new assembly and the hierarchyid data type will automatically be installed. Upgrade advisor rules detect any user type or assemblies with conflicting names. The upgrade advisor will advise renaming of any conflicting assembly, and either renaming any conflicting type, or using two-part names in the code to refer to that preexisting user type.
If a database upgrade detects a user assembly with conflicting name, it will automatically rename that assembly and put the database into suspect mode.
If a user type with conflicting name exists during the upgrade, no special steps are taken. After the upgrade, both the old user type, and the new system type, will exist. The user type will be available only through two-part names.