Always patch your new $ORACLE_HOME before you start the upgrade process for three reasons:
(1) Omit pitfalls
You’ll omit possibly existing (but already) fixed bug-related pitfalls
(2) Save time
It’ll save you time because you’ll have just one upgrade instead of two
(3) Possible Downgrade
You’ll keep the possibility of a later downgrade. You can
just downgrade to the version you’ve upgraded from, i.e. going from
10.2.0.3 to 11.1.0.6 and then to 11.1.0.7 means that you’ll be able to
downgrade just to 11.1.0.6. But if you’d upgraded from 10.2.0.3 to
11.1.0.7 directly then you’ll be able to downgrade back to 10.2.0.3 –
if you haven’t changed the COMPATIBLE parameter.
You’ll find the right patch information by looking up these Metalink Notes:
Recommended Database Patches
Available Patch Sets for Oracle Database 11g
Know Issues and Alerts for 11.1.0.7
Introduction to PSUs (Patch Set Updates)
July 2009 PSU
Known Issues with PSUs