I've learned (from my very own personal experiences...) that updating Joomla 1 to 1.5 isn't a very good idea most of the time. There are so many differences between the two versions that I find it better to spend an hour or so just to "copy&paste" all articles from the old 1.0 installation over to a new 1.5.
Installing a new 1.5 on the same machine where you already run 1.0 is no problem.
Also, I've always used the SiteMaker contrib in order to do "normal" installations of Joomla 1.5 without using any particulat Joomla contrib, and it works right out of the box.
So what I would suggest is:
- Install SiteMaker contrib
- Run SiteMaker in order to prepare your new Joomla 1.5 installation
- Install Joomla 1.5
- Manually, in 1.5, create the sections/categories you used in your old 1.0 installation
- Work through each article in your old Joomla, and "copy&paste" them over to your new 1.5
- Add any extensions you like
- Smile!
You'll end up with a much "cleaner" 1.5 installation this way, I think!