the usual procedure was : get new version and upgrade the virtual hardware to the new level
however with WS 8 I would not do that so light heartedly
you do not know yet if it works for you - so I would not upgrade any VM in the first few weeks
better wait until you know that WS 8 works as good as WS 7 on your host - you would not be the first to go back to WS 7
anyway - as always with risky installs like Windows updates or vmware-tools changes ... take a snapshot first